MTDR
Matador Resources Co
Price:  
48.22 
USD
Volume:  
1,846,017.00
United States | Oil, Gas & Consumable Fuels
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MTDR WACC - Weighted Average Cost of Capital

The WACC of Matador Resources Co (MTDR) is 8.8%.

The Cost of Equity of Matador Resources Co (MTDR) is 11.15%.
The Cost of Debt of Matador Resources Co (MTDR) is 5.50%.

Range Selected
Cost of equity 9.60% - 12.70% 11.15%
Tax rate 14.40% - 19.40% 16.90%
Cost of debt 4.60% - 6.40% 5.50%
WACC 7.6% - 10.0% 8.8%
WACC

MTDR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.24 1.4
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.70%
Tax rate 14.40% 19.40%
Debt/Equity ratio 0.55 0.55
Cost of debt 4.60% 6.40%
After-tax WACC 7.6% 10.0%
Selected WACC 8.8%

MTDR'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 MTDR:

cost_of_equity (11.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.24) + 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.