GDP
Goodrich Petroleum Corp
Price:  
23.02 
USD
Volume:  
149,388.00
United States | Oil, Gas & Consumable Fuels
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GDP WACC - Weighted Average Cost of Capital

The WACC of Goodrich Petroleum Corp (GDP) is 6.2%.

The Cost of Equity of Goodrich Petroleum Corp (GDP) is 7.25%.
The Cost of Debt of Goodrich Petroleum Corp (GDP) is 4.25%.

Range Selected
Cost of equity 5.80% - 8.70% 7.25%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 4.00% - 4.50% 4.25%
WACC 5.1% - 7.3% 6.2%
WACC

GDP WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.63 0.86
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 8.70%
Tax rate 27.00% 27.00%
Debt/Equity ratio 0.35 0.35
Cost of debt 4.00% 4.50%
After-tax WACC 5.1% 7.3%
Selected WACC 6.2%

GDP'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 GDP:

cost_of_equity (7.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.63) + 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.