MXC WACC - Weighted Average Cost of Capital
The WACC of Mexco Energy Corp (MXC) is 6.2%.
| Range | Selected | |
| Cost of equity | 5.6% - 10.7% | 8.15% |
| Tax rate | 2.0% - 8.1% | 5.05% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 5.0% - 7.4% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.38 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 10.7% |
| Tax rate | 2.0% | 8.1% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 5.0% | 7.4% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MXC | Mexco Energy Corp | 0.93 | -0.08 | -0.04 |
| CEI | Camber Energy Inc | 2.64 | 0.7 | 0.2 |
| DKL.V | Decklar Resources Inc | 2.88 | 1.72 | 0.45 |
| KDKN | Kodiak Energy Inc | 43530.38 | 0 | 0 |
| MAH.V | Marksmen Energy Inc | 1.24 | -1.38 | -0.63 |
| NRIS | Norris Industries Inc | 0.53 | 1.82 | 1.2 |
| PFC.V | PetroFrontier Corp | 2.26 | 0.06 | 0.02 |
| PRE.V | Paleo Resources Inc | 0.58 | 1.05 | 0.67 |
| PUL.V | Pulse Oil Corp | 0.01 | 1.76 | 1.74 |
| REOS | ReoStar Energy Corp | 30.53 | -1.29 | -0.04 |
| SPI.V | Canadian Spirit Resources Inc | 0 | 1.15 | 1.15 |
| Low | High | |
| Unlevered beta | 0.02 | 0.45 |
| Relevered beta | 0.07 | 1.04 |
| Adjusted relevered beta | 0.38 | 1.03 |
MXC'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 MXC:
cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.