CRK WACC - Weighted Average Cost of Capital
The WACC of Comstock Resources Inc (CRK) is 7.5%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.3% | 8.2% |
| Tax rate | 14.6% - 16.4% | 15.5% |
| Cost of debt | 7.0% - 7.3% | 7.15% |
| WACC | 6.8% - 8.3% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.7 | 0.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.3% |
| Tax rate | 14.6% | 16.4% |
| Debt/Equity ratio | 0.42 | 0.42 |
| Cost of debt | 7.0% | 7.3% |
| After-tax WACC | 6.8% | 8.3% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CRK | Comstock Resources Inc | 0.42 | 1.43 | 1.05 |
| ARX.TO | ARC Resources Ltd | 0.14 | 1.29 | 1.15 |
| BRY | Berry Corporation (Bry) | 2.22 | 1.07 | 0.37 |
| BSM | Black Stone Minerals LP | 0.01 | 0.46 | 0.46 |
| CPE | Callon Petroleum Co | 0.81 | 0.57 | 0.34 |
| DEN | Denbury Inc | 0.01 | 0.41 | 0.41 |
| FEC.TO | Frontera Energy Corp | 1.96 | 1.5 | 0.56 |
| GPRK | GeoPark Ltd | 1.55 | 0.87 | 0.38 |
| KOS | Kosmos Energy Ltd | 3.52 | 1.6 | 0.4 |
| OAS | Oasis Petroleum Inc | 0.18 | 0.99 | 0.85 |
| Low | High | |
| Unlevered beta | 0.41 | 0.5 |
| Relevered beta | 0.55 | 0.69 |
| Adjusted relevered beta | 0.7 | 0.79 |
CRK'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 CRK:
cost_of_equity (8.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.7) + 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.