GEI.TO
Gibson Energy Inc
Price:  
22.29 
CAD
Volume:  
110,547.00
Canada | Oil, Gas & Consumable Fuels
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

GEI.TO WACC - Weighted Average Cost of Capital

The WACC of Gibson Energy Inc (GEI.TO) is 5.3%.

The Cost of Equity of Gibson Energy Inc (GEI.TO) is 6.20%.
The Cost of Debt of Gibson Energy Inc (GEI.TO) is 5.40%.

Range Selected
Cost of equity 5.30% - 7.10% 6.20%
Tax rate 21.80% - 23.80% 22.80%
Cost of debt 4.00% - 6.80% 5.40%
WACC 4.4% - 6.3% 5.3%
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 0.42 0.49
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.30% 7.10%
Tax rate 21.80% 23.80%
Debt/Equity ratio 0.75 0.75
Cost of debt 4.00% 6.80%
After-tax WACC 4.4% 6.3%
Selected WACC 5.3%

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 (6.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.42) + 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.