CCLP WACC - Weighted Average Cost of Capital
The WACC of CSI Compressco LP (CCLP) is 9.6%.
| Range | Selected | |
| Cost of equity | 7.2% - 10.8% | 9% |
| Tax rate | 11.6% - 18.1% | 14.85% |
| Cost of debt | 7.9% - 15.6% | 11.75% |
| WACC | 7.0% - 12.1% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.73 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 10.8% |
| Tax rate | 11.6% | 18.1% |
| Debt/Equity ratio | 1.82 | 1.82 |
| Cost of debt | 7.9% | 15.6% |
| After-tax WACC | 7.0% | 12.1% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CCLP | CSI Compressco LP | 1.82 | 0.88 | 0.34 |
| CKK.V | Cordy Oilfield Services Inc | 1.79 | 0.75 | 0.29 |
| CPS.V | Canadian Premium Sand Inc | 0.19 | -0.03 | -0.03 |
| CWC.V | Cwc Energy Services Corp | 0.52 | 1.15 | 0.79 |
| ENGT | Energy and Technology Corp | 0.43 | -0.37 | -0.27 |
| ENSV | Enservco Corp | 8.61 | -0.56 | -0.07 |
| ESN.TO | Essential Energy Services Ltd | 0.21 | 0.64 | 0.53 |
| LRDC | Laredo Oil Inc | 0.17 | 0.17 | 0.14 |
| NES | Nuverra Environmental Solutions Inc | 0.99 | 1.59 | 0.85 |
| SND | Smart Sand Inc | 0.14 | 1.04 | 0.93 |
| Low | High | |
| Unlevered beta | 0.23 | 0.42 |
| Relevered beta | 0.6 | 1.09 |
| Adjusted relevered beta | 0.73 | 1.06 |
CCLP'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 CCLP:
cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.