HPK
Highpeak Energy Inc
Price:  
8.71 
USD
Volume:  
401,468.00
United States | Oil, Gas & Consumable Fuels
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HPK WACC - Weighted Average Cost of Capital

The WACC of Highpeak Energy Inc (HPK) is 10.9%.

The Cost of Equity of Highpeak Energy Inc (HPK) is 9.85%.
The Cost of Debt of Highpeak Energy Inc (HPK) is 15.60%.

Range Selected
Cost of equity 8.50% - 11.20% 9.85%
Tax rate 23.40% - 23.70% 23.55%
Cost of debt 15.60% - 15.60% 15.60%
WACC 10.3% - 11.6% 10.9%
WACC

HPK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.01 1.12
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.50% 11.20%
Tax rate 23.40% 23.70%
Debt/Equity ratio 1 1
Cost of debt 15.60% 15.60%
After-tax WACC 10.3% 11.6%
Selected WACC 10.9%

HPK'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 HPK:

cost_of_equity (9.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.01) + 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.