The WACC of Orca Exploration Group Inc (ORC.B.V) is 8.8%.
Range | Selected | |
Cost of equity | 8.0% - 11.0% | 9.5% |
Tax rate | 40.2% - 48.4% | 44.3% |
Cost of debt | 7.0% - 14.5% | 10.75% |
WACC | 7.3% - 10.3% | 8.8% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.82 | 1.01 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.0% | 11.0% |
Tax rate | 40.2% | 48.4% |
Debt/Equity ratio | 0.25 | 0.25 |
Cost of debt | 7.0% | 14.5% |
After-tax WACC | 7.3% | 10.3% |
Selected WACC | 8.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ORC.B.V | Orca Exploration Group Inc | 0.25 | 1.16 | 1.02 |
BATL | Battalion Oil Corp | 8.2 | 1.44 | 0.26 |
CRBO | Carbon Energy Corp | 2.9 | -0.43 | -0.16 |
KRP | Kimbell Royalty Partners LP | 0.16 | 0.69 | 0.63 |
PIPE.TO | Pipestone Energy Corp | 0.39 | 1.39 | 1.14 |
REI | Ring Energy Inc | 2.37 | 0.97 | 0.42 |
SD | SandRidge Energy Inc | 0 | 0.81 | 0.81 |
SRX.TO | Storm Resources Ltd | 0.18 | 1.44 | 1.31 |
TAL.V | Petrotal Corp | 0.22 | 2.07 | 1.84 |
YGR.TO | Yangarra Resources Ltd | 1.13 | 1.04 | 0.64 |
Low | High | |
Unlevered beta | 0.64 | 0.89 |
Relevered beta | 0.73 | 1.01 |
Adjusted relevered beta | 0.82 | 1.01 |
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 ORC.B.V:
cost_of_equity (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.82) + 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.