GEI.TO
Gibson Energy Inc
Price:  
24.27 
CAD
Volume:  
114,304.00
Canada | Oil, Gas & Consumable Fuels
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GEI.TO WACC - Weighted Average Cost of Capital

The WACC of Gibson Energy Inc (GEI.TO) is 6.2%.

The Cost of Equity of Gibson Energy Inc (GEI.TO) is 7.70%.
The Cost of Debt of Gibson Energy Inc (GEI.TO) is 5.15%.

Range Selected
Cost of equity 6.20% - 9.20% 7.70%
Tax rate 21.80% - 23.80% 22.80%
Cost of debt 4.00% - 6.30% 5.15%
WACC 5.0% - 7.4% 6.2%
WACC

GEI.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.6 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 9.20%
Tax rate 21.80% 23.80%
Debt/Equity ratio 0.67 0.67
Cost of debt 4.00% 6.30%
After-tax WACC 5.0% 7.4%
Selected WACC 6.2%

GEI.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 GEI.TO:

cost_of_equity (7.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.6) + 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.