The WACC of Crew Energy Inc (CR.TO) is 9.8%.
Range | Selected | |
Cost of equity | 8.70% - 11.50% | 10.10% |
Tax rate | 20.40% - 22.80% | 21.60% |
Cost of debt | 4.10% - 6.60% | 5.35% |
WACC | 8.4% - 11.1% | 9.8% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.1 | 1.2 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.70% | 11.50% |
Tax rate | 20.40% | 22.80% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 4.10% | 6.60% |
After-tax WACC | 8.4% | 11.1% |
Selected WACC | 9.8% | |
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 CR.TO:
cost_of_equity (10.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.1) + 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.