DVG.V WACC - Weighted Average Cost of Capital

The WACC of Divergent Energy Services Ltd (DVG.V) is 9.5%.

The Cost of Equity of Divergent Energy Services Ltd (DVG.V) is 19.35%.

The Cost of Debt of Divergent Energy Services Ltd (DVG.V) is 12.45%.

	Range	Selected
Cost of equity	7.20% - 31.50%	19.35%
Tax rate	26.20% - 27.00%	26.60%
Cost of debt	4.00% - 20.90%	12.45%
WACC	3.1% - 15.8%	9.5%

WACC

DVG.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.66	4.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	31.50%

Tax rate	26.20%	27.00%
Debt/Equity ratio	25.97	25.97
Cost of debt	4.00%	20.90%

After-tax WACC	3.1%	15.8%


Selected WACC	9.5%

DVG.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 DVG.V:

cost_of_equity (19.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.