CJ.TO
Cardinal Energy Ltd (Alberta)
Price:  
6.91 
CAD
Volume:  
306,350.00
Canada | Oil, Gas & Consumable Fuels
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CJ.TO WACC - Weighted Average Cost of Capital

The WACC of Cardinal Energy Ltd (Alberta) (CJ.TO) is 9.3%.

The Cost of Equity of Cardinal Energy Ltd (Alberta) (CJ.TO) is 9.65%.
The Cost of Debt of Cardinal Energy Ltd (Alberta) (CJ.TO) is 6.90%.

Range Selected
Cost of equity 8.30% - 11.00% 9.65%
Tax rate 15.50% - 23.70% 19.60%
Cost of debt 4.00% - 9.80% 6.90%
WACC 8.0% - 10.7% 9.3%
WACC

CJ.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.02 1.12
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.00%
Tax rate 15.50% 23.70%
Debt/Equity ratio 0.08 0.08
Cost of debt 4.00% 9.80%
After-tax WACC 8.0% 10.7%
Selected WACC 9.3%

CJ.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 CJ.TO:

cost_of_equity (9.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.02) + 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.