PCL.AX WACC - Weighted Average Cost of Capital
The WACC of Pancontinental Oil & Gas NL (PCL.AX) is 5.5%.
| Range | Selected | |
| Cost of equity | 6.3% - 8.9% | 7.6% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 6.2% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.45 | 0.63 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 8.9% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 6.2% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PCL.AX | Pancontinental Oil & Gas NL | 1.1 | 2.36 | 1.34 |
| FAR.AX | FAR Ltd | 0 | 0.14 | 0.14 |
| GGX.AX | Gas2grid Ltd | 0.31 | 1.77 | 1.45 |
| HPR.AX | High Peak Royalties Ltd | 0.07 | -0.65 | -0.62 |
| ICN.AX | Icon Energy Ltd | 0.09 | -1.39 | -1.31 |
| LIO.AX | Lion Energy Ltd | 0.36 | 0.27 | 0.21 |
| LKO.AX | Lakes Oil NL | 0.27 | -0.03 | -0.02 |
| MEL.AX | Metgasco Ltd | 0.38 | 1.16 | 0.92 |
| TDO.AX | 3D Oil Ltd | 0 | 0.46 | 0.46 |
| Low | High | |
| Unlevered beta | 0.15 | 0.41 |
| Relevered beta | 0.18 | 0.45 |
| Adjusted relevered beta | 0.45 | 0.63 |
PCL.AX'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 PCL.AX:
cost_of_equity (7.60%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.45) + 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.