MXC
Mexco Energy Corp
Price:  
7.81 
USD
Volume:  
2,536
United States | Oil, Gas & Consumable Fuels

MXC WACC - Weighted Average Cost of Capital

The WACC of Mexco Energy Corp (MXC) is 6.2%.

The Cost of Equity of Mexco Energy Corp (MXC) is 8.15%.
The Cost of Debt of Mexco Energy Corp (MXC) is 4.5%.

RangeSelected
Cost of equity5.6% - 10.7%8.15%
Tax rate2.0% - 8.1%5.05%
Cost of debt4.5% - 4.5%4.5%
WACC5.0% - 7.4%6.2%
WACC

MXC WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.381.03
Additional risk adjustments0.0%0.5%
Cost of equity5.6%10.7%
Tax rate2.0%8.1%
Debt/Equity ratio
11
Cost of debt4.5%4.5%
After-tax WACC5.0%7.4%
Selected WACC6.2%

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.