HME.V
Hemisphere Energy Corp
Price:  
1.74 
CAD
Volume:  
66,774.00
Canada | Oil, Gas & Consumable Fuels
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HME.V WACC - Weighted Average Cost of Capital

The WACC of Hemisphere Energy Corp (HME.V) is 10.7%.

The Cost of Equity of Hemisphere Energy Corp (HME.V) is 10.80%.
The Cost of Debt of Hemisphere Energy Corp (HME.V) is 7.00%.

Range Selected
Cost of equity 9.20% - 12.40% 10.80%
Tax rate 14.40% - 24.60% 19.50%
Cost of debt 4.50% - 9.50% 7.00%
WACC 9.1% - 12.3% 10.7%
WACC

HME.V WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.04 1.24
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.40%
Tax rate 14.40% 24.60%
Debt/Equity ratio 0.02 0.02
Cost of debt 4.50% 9.50%
After-tax WACC 9.1% 12.3%
Selected WACC 10.7%

HME.V'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 HME.V:

cost_of_equity (10.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.04) + 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.