MARPS
Marine Petroleum Trust
Price:  
3.91 
USD
Volume:  
677.00
United States | Oil, Gas & Consumable Fuels
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MARPS WACC - Weighted Average Cost of Capital

The WACC of Marine Petroleum Trust (MARPS) is 7.4%.

The Cost of Equity of Marine Petroleum Trust (MARPS) is 11.20%.
The Cost of Debt of Marine Petroleum Trust (MARPS) is 5.00%.

Range Selected
Cost of equity 9.50% - 12.90% 11.20%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 8.3% 7.4%
WACC

MARPS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.23 1.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.50% 12.90%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 8.3%
Selected WACC 7.4%

MARPS'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 MARPS:

cost_of_equity (11.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.23) + 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.