FNEC
First National Energy Corp
Price:  
0.06 
USD
Volume:  
510.00
Canada | Independent Power and Renewable Electricity Producers
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FNEC WACC - Weighted Average Cost of Capital

The WACC of First National Energy Corp (FNEC) is 7.2%.

The Cost of Equity of First National Energy Corp (FNEC) is 7.60%.
The Cost of Debt of First National Energy Corp (FNEC) is 5.00%.

Range Selected
Cost of equity 6.30% - 8.90% 7.60%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.0% - 8.4% 7.2%
WACC

FNEC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.53 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 8.90%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.11 0.11
Cost of debt 5.00% 5.00%
After-tax WACC 6.0% 8.4%
Selected WACC 7.2%

FNEC'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 FNEC:

cost_of_equity (7.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.53) + 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.