CUDA.V WACC - Weighted Average Cost of Capital
The WACC of Cuda Oil and Gas Inc (CUDA.V) is 5.1%.
| Range | Selected | |
| Cost of equity | 5.3% - 6.7% | 6% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 5.1% - 5.1% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.34 | 0.35 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.3% | 6.7% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 58.47 | 58.47 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 5.1% | 5.1% |
| Selected WACC | 5.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CUDA.V | Cuda Oil and Gas Inc | 58.47 | 2.98 | 0.07 |
| AZGSQ | Aztec Oil & Gas Inc | 36448.73 | 61.76 | 0 |
| FDEI | Fidelis Energy Inc | 42115.04 | 0 | 0 |
| IGPG | Ignis Petroleum Group Inc | 11370.81 | 22.52 | 0 |
| KDKN | Kodiak Energy Inc | 43530.38 | 0 | 0 |
| NFEI | New Frontier Energy Inc | 5348.31 | 0 | 0 |
| SOIS | Striker Oil & Gas Inc | 0.62 | 0 | 0 |
| SVSE | Silver Star Energy Inc | 35647.47 | 9.63 | 0 |
| TRXO | Columbine Valley Resources Inc | 6.87 | 8.99 | 1.49 |
| TXHE | Texhoma Energy Inc | 3427.14 | 0 | 0 |
| XL.V | XXL Energy Corp | 38.09 | -0.18 | -0.01 |
| Low | High | |
| Unlevered beta | 0 | 0 |
| Relevered beta | 0.01 | 0.03 |
| Adjusted relevered beta | 0.34 | 0.35 |
CUDA.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 CUDA.V:
cost_of_equity (6.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.20%) * adjusted_beta (0.34) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.