CTA.V
Centaurus Energy Inc
Price:  
2.50 
CAD
Volume:  
4,330.00
Canada | Oil, Gas & Consumable Fuels
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CTA.V WACC - Weighted Average Cost of Capital

The WACC of Centaurus Energy Inc (CTA.V) is 6.4%.

The Cost of Equity of Centaurus Energy Inc (CTA.V) is 10.95%.
The Cost of Debt of Centaurus Energy Inc (CTA.V) is 5.00%.

Range Selected
Cost of equity 8.70% - 13.20% 10.95%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.6% - 7.3% 6.4%
WACC

CTA.V WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.95 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.70% 13.20%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1.62 1.62
Cost of debt 5.00% 5.00%
After-tax WACC 5.6% 7.3%
Selected WACC 6.4%

CTA.V'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 CTA.V:

cost_of_equity (10.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.95) + 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.