The WACC of Cub Energy Inc (KUB.V) is 9.2%.
Range | Selected | |
Cost of equity | 8.9% - 12.8% | 10.85% |
Tax rate | 0.0% - 0.1% | 0.05% |
Cost of debt | 4.0% - 4.6% | 4.3% |
WACC | 7.6% - 10.7% | 9.2% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.98 | 1.3 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.9% | 12.8% |
Tax rate | 0.0% | 0.1% |
Debt/Equity ratio | 0.34 | 0.34 |
Cost of debt | 4.0% | 4.6% |
After-tax WACC | 7.6% | 10.7% |
Selected WACC | 9.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
KUB.V | Cub Energy Inc | 0.34 | 1.53 | 1.14 |
ATU.V | Altura Energy Inc | 0.14 | 2.04 | 1.78 |
HOCL.V | Highwood Oil Company Ltd | 0.07 | 0.93 | 0.87 |
KEI.TO | Kolibri Global Energy Inc | 0.14 | 0.59 | 0.52 |
NZ.V | New Zealand Energy Corp | 0.47 | 2.08 | 1.41 |
PEI.V | Prospera Energy Inc | 0.5 | 0.17 | 0.11 |
SOIL.V | Saturn Oil & Gas Inc | 0.67 | 1.75 | 1.05 |
TAO.V | TAG Oil Ltd | 0.02 | 1.78 | 1.74 |
XBOR | Cross Border Resources Inc | 0.47 | 0 | 0 |
XL.V | XXL Energy Corp | 44.71 | -0.26 | -0.01 |
Low | High | |
Unlevered beta | 0.73 | 1.09 |
Relevered beta | 0.97 | 1.45 |
Adjusted relevered beta | 0.98 | 1.3 |
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 KUB.V:
cost_of_equity (10.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.98) + 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.