GASE WACC - Weighted Average Cost of Capital
The WACC of Gase Energy Inc (GASE) is 4.7%.
| Range | Selected | |
| Cost of equity | 4.2% - 6.7% | 5.45% |
| Tax rate | 0.1% - 11.0% | 5.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 4.5% | 4.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.07 | 0.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.2% | 6.7% |
| Tax rate | 0.1% | 11.0% |
| Debt/Equity ratio | 33.2 | 33.2 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 4.5% |
| Selected WACC | 4.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GASE | Gase Energy Inc | 33.9 | -0.82 | -0.02 |
| Low | High | |
| Unlevered beta | -0.02 | -0.02 |
| Relevered beta | -0.39 | 0 |
| Adjusted relevered beta | 0.07 | 0.33 |
GASE'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 GASE:
cost_of_equity (5.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.07) + 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.