ESI.TO WACC - Weighted Average Cost of Capital

The WACC of Ensign Energy Services Inc (ESI.TO) is 10.0%.

The Cost of Equity of Ensign Energy Services Inc (ESI.TO) is 9.70%.

The Cost of Debt of Ensign Energy Services Inc (ESI.TO) is 14.15%.

	Range	Selected
Cost of equity	7.30% - 12.10%	9.70%
Tax rate	20.40% - 30.30%	25.35%
Cost of debt	8.10% - 20.20%	14.15%
WACC	6.8% - 13.3%	10.0%

WACC

ESI.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.81	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	12.10%

Tax rate	20.40%	30.30%
Debt/Equity ratio	1.66	1.66
Cost of debt	8.10%	20.20%

After-tax WACC	6.8%	13.3%


Selected WACC	10.0%

ESI.TO'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 ESI.TO:

cost_of_equity (9.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.81) + 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.