PEI.V WACC - Weighted Average Cost of Capital
The WACC of Prospera Energy Inc (PEI.V) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.3% | 6.4% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 10.1% | 8.55% |
| WACC | 5.4% - 7.3% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 7.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.96 | 0.96 |
| Cost of debt | 7.0% | 10.1% |
| After-tax WACC | 5.4% | 7.3% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PEI.V | Prospera Energy Inc | 0.96 | 0.15 | 0.09 |
| KDKN | Kodiak Energy Inc | 43530.38 | 0 | 0 |
| NZ.V | New Zealand Energy Corp | 0.7 | 2.06 | 1.36 |
| PUL.V | Pulse Oil Corp | 0.01 | 1.67 | 1.65 |
| REOS | ReoStar Energy Corp | 30.53 | -1.31 | -0.06 |
| SOIS | Striker Oil & Gas Inc | 0.62 | 0 | 0 |
| TCEC | TransCoastal Corp | 3.27 | 0 | 0 |
| TRXO | Columbine Valley Resources Inc | 2.04 | 0.18 | 0.07 |
| XL.V | XXL Energy Corp | 52.21 | -0.41 | -0.01 |
| Low | High | |
| Unlevered beta | 0 | 0.06 |
| Relevered beta | 0 | 0.09 |
| Adjusted relevered beta | 0.33 | 0.39 |
PEI.V'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 PEI.V:
cost_of_equity (6.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.