PEA.TO WACC - Weighted Average Cost of Capital

The WACC of Pieridae Energy Ltd (PEA.TO) is 7.9%.

The Cost of Equity of Pieridae Energy Ltd (PEA.TO) is 12.45%.

The Cost of Debt of Pieridae Energy Ltd (PEA.TO) is 8.40%.

	Range	Selected
Cost of equity	10.20% - 14.70%	12.45%
Tax rate	17.80% - 47.80%	32.80%
Cost of debt	7.00% - 9.80%	8.40%
WACC	7.3% - 8.4%	7.9%

WACC

PEA.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.37	1.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	14.70%

Tax rate	17.80%	47.80%
Debt/Equity ratio	1.86	1.86
Cost of debt	7.00%	9.80%

After-tax WACC	7.3%	8.4%


Selected WACC	7.9%

PEA.TO'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 PEA.TO:

cost_of_equity (12.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.37) + 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.