The WACC of Eurogas International Inc (EI.CN) is 5.2%.
Range | Selected | |
Cost of equity | 123.40% - 256.90% | 190.15% |
Tax rate | 25.90% - 26.50% | 26.20% |
Cost of debt | 5.00% - 5.00% | 5.00% |
WACC | 4.7% - 5.7% | 5.2% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 23.58 | 41.44 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 123.40% | 256.90% |
Tax rate | 25.90% | 26.50% |
Debt/Equity ratio | 123.89 | 123.89 |
Cost of debt | 5.00% | 5.00% |
After-tax WACC | 4.7% | 5.7% |
Selected WACC | 5.2% | |
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 EI.CN:
cost_of_equity (190.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (23.58) + 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.