GEI.TO WACC - Weighted Average Cost of Capital

The WACC of Gibson Energy Inc (GEI.TO) is 4.9%.

The Cost of Equity of Gibson Energy Inc (GEI.TO) is 5.25%.

The Cost of Debt of Gibson Energy Inc (GEI.TO) is 5.55%.

	Range	Selected
Cost of equity	4.40% - 6.10%	5.25%
Tax rate	22.80% - 23.80%	23.30%
Cost of debt	4.30% - 6.80%	5.55%
WACC	4.0% - 5.8%	4.9%

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	0.24	0.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.40%	6.10%

Tax rate	22.80%	23.80%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.30%	6.80%

After-tax WACC	4.0%	5.8%


Selected WACC	4.9%

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 (5.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.24) + 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.