The WACC of Jura Energy Corp (JEC.V) is 10.7%.
Range | Selected | |
Cost of equity | 10.00% - 19.70% | 14.85% |
Tax rate | 13.10% - 24.50% | 18.80% |
Cost of debt | 7.00% - 16.60% | 11.80% |
WACC | 7.1% - 14.3% | 10.7% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.2 | 2.42 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.00% | 19.70% |
Tax rate | 13.10% | 24.50% |
Debt/Equity ratio | 2.98 | 2.98 |
Cost of debt | 7.00% | 16.60% |
After-tax WACC | 7.1% | 14.3% |
Selected WACC | 10.7% | |
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 JEC.V:
cost_of_equity (14.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.2) + 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.