GPRK
GeoPark Ltd
Price:  
6.28 
USD
Volume:  
1,413,954.00
Chile | Oil, Gas & Consumable Fuels
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

GPRK WACC - Weighted Average Cost of Capital

The WACC of GeoPark Ltd (GPRK) is 7.1%.

The Cost of Equity of GeoPark Ltd (GPRK) is 14.50%.
The Cost of Debt of GeoPark Ltd (GPRK) is 5.05%.

Range Selected
Cost of equity 12.20% - 16.80% 14.50%
Tax rate 46.20% - 49.90% 48.05%
Cost of debt 4.90% - 5.20% 5.05%
WACC 6.2% - 7.9% 7.1%
WACC

GPRK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.81 2.13
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.20% 16.80%
Tax rate 46.20% 49.90%
Debt/Equity ratio 1.68 1.68
Cost of debt 4.90% 5.20%
After-tax WACC 6.2% 7.9%
Selected WACC 7.1%

GPRK'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 GPRK:

cost_of_equity (14.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.81) + 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.