BTE.TO WACC - Weighted Average Cost of Capital
The WACC of Baytex Energy Corp (BTE.TO) is 7.3%.
| Range | Selected | |
| Cost of equity | 5.1% - 12.8% | 8.95% |
| Tax rate | 5.6% - 18.3% | 11.95% |
| Cost of debt | 4.9% - 9.0% | 6.95% |
| WACC | 4.8% - 9.7% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.38 | 1.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 12.8% |
| Tax rate | 5.6% | 18.3% |
| Debt/Equity ratio | 1.29 | 1.29 |
| Cost of debt | 4.9% | 9.0% |
| After-tax WACC | 4.8% | 9.7% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BTE.TO | Baytex Energy Corp | 1.29 | 2.05 | 0.93 |
| BIR.TO | Birchcliff Energy Ltd | 0.41 | 1.24 | 0.9 |
| ESTE | Earthstone Energy Inc | 0.35 | 0.98 | 0.73 |
| RYPE | Royalite Petroleum Company Inc | 0 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.77 | 0.86 |
| Relevered beta | 0.07 | 1.63 |
| Adjusted relevered beta | 0.38 | 1.42 |
BTE.TO's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for BTE.TO:
cost_of_equity (8.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.