CPE
Callon Petroleum Co
Price:  
35.76 
USD
Volume:  
30,421,500.00
United States | Oil, Gas & Consumable Fuels
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

CPE WACC - Weighted Average Cost of Capital

The WACC of Callon Petroleum Co (CPE) is 7.8%.

The Cost of Equity of Callon Petroleum Co (CPE) is 10.05%.
The Cost of Debt of Callon Petroleum Co (CPE) is 5.60%.

Range Selected
Cost of equity 8.70% - 11.40% 10.05%
Tax rate 3.60% - 16.70% 10.15%
Cost of debt 5.30% - 5.90% 5.60%
WACC 7.1% - 8.5% 7.8%
WACC

CPE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.04 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 11.40%
Tax rate 3.60% 16.70%
Debt/Equity ratio 0.81 0.81
Cost of debt 5.30% 5.90%
After-tax WACC 7.1% 8.5%
Selected WACC 7.8%

CPE'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 CPE:

cost_of_equity (10.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.04) + 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.