KEL.TO WACC - Weighted Average Cost of Capital
The WACC of Kelt Exploration Ltd (KEL.TO) is 10.1%.
| Range | Selected | |
| Cost of equity | 6.3% - 11.3% | 8.8% |
| Tax rate | 23.2% - 24.6% | 23.9% |
| Cost of debt | 4.0% - 69.1% | 36.55% |
| WACC | 6.1% - 14.2% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.62 | 1.17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 11.3% |
| Tax rate | 23.2% | 24.6% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 69.1% |
| After-tax WACC | 6.1% | 14.2% |
| Selected WACC | 10.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KEL.TO | Kelt Exploration Ltd | 0.08 | 1.34 | 1.26 |
| AAV.TO | Advantage Oil & Gas Ltd | 0.4 | 1.52 | 1.17 |
| BATL | Battalion Oil Corp | 4.42 | 1.9 | 0.44 |
| CJ.TO | Cardinal Energy Ltd (Alberta) | 0.08 | 1.27 | 1.2 |
| CRBO | Carbon Energy Corp | 2.9 | -0.43 | -0.13 |
| GTE | Gran Tierra Energy Inc | 3.54 | 0.69 | 0.19 |
| NSLPQ | New Source Energy Partners LP | 4524178.5 | -1.4 | 0 |
| REI | Ring Energy Inc | 2.5 | 1.04 | 0.36 |
| SRX.TO | Storm Resources Ltd | 0.18 | 1.44 | 1.27 |
| TVE.TO | Tamarack Valley Energy Ltd | 0.31 | 1.73 | 1.4 |
| Low | High | |
| Unlevered beta | 0.41 | 1.18 |
| Relevered beta | 0.43 | 1.25 |
| Adjusted relevered beta | 0.62 | 1.17 |
KEL.TO'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 KEL.TO:
cost_of_equity (8.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + 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.