The WACC of Kolibri Global Energy Inc (KEI.TO) is 9.0%.
Range | Selected | |
Cost of equity | 8.0% - 11.6% | 9.8% |
Tax rate | 25.9% - 26.5% | 26.2% |
Cost of debt | 4.1% - 5.1% | 4.6% |
WACC | 7.4% - 10.6% | 9.0% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.96 | 1.21 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.0% | 11.6% |
Tax rate | 25.9% | 26.5% |
Debt/Equity ratio | 0.15 | 0.15 |
Cost of debt | 4.1% | 5.1% |
After-tax WACC | 7.4% | 10.6% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
KEI.TO | Kolibri Global Energy Inc | 0.15 | 0.75 | 0.68 |
ATU.V | Altura Energy Inc | 0.14 | 2.04 | 1.84 |
JEC.V | Jura Energy Corp | 5.33 | -0.48 | -0.1 |
KUB.V | Cub Energy Inc | 0.33 | 1.53 | 1.23 |
NZ.V | New Zealand Energy Corp | 0.47 | 2.05 | 1.52 |
RSRV | Reserve Petroleum Co | 0.05 | 0.06 | 0.06 |
SOIL.V | Saturn Oil & Gas Inc | 0.67 | 1.75 | 1.17 |
TAO.V | TAG Oil Ltd | 0.02 | 2.05 | 2.03 |
VLE.TO | Valeura Energy Inc | 0.13 | 1.05 | 0.96 |
XBOR | Cross Border Resources Inc | 0.47 | 0 | 0 |
Low | High | |
Unlevered beta | 0.85 | 1.19 |
Relevered beta | 0.94 | 1.31 |
Adjusted relevered beta | 0.96 | 1.21 |
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 KEI.TO:
cost_of_equity (9.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.96) + 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.