GSPE
GulfSlope Energy Inc
Price:  
USD
Volume:  
80,950
United States | Oil, Gas & Consumable Fuels

GSPE WACC - Weighted Average Cost of Capital

The WACC of GulfSlope Energy Inc (GSPE) is 5.0%.

The Cost of Equity of GulfSlope Energy Inc (GSPE) is 8601.65%.
The Cost of Debt of GulfSlope Energy Inc (GSPE) is 5%.

RangeSelected
Cost of equity4782.2% - 12421.1%8601.65%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.0% - 5.0%5%
WACC4.4% - 5.5%5.0%
WACC

GSPE WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1038.782217.19
Additional risk adjustments0.0%0.5%
Cost of equity4782.2%12421.1%
Tax rate26.2%27.0%
Debt/Equity ratio
6580.46580.4
Cost of debt5.0%5.0%
After-tax WACC4.4%5.5%
Selected WACC5.0%

GSPE WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.250.5
Relevered beta1549.933308.75
Adjusted relevered beta1038.782217.19

GSPE'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 GSPE:

cost_of_equity (8,601.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1038.78) + 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.