PFC.V
PetroFrontier Corp
Price:  
0.02 
CAD
Volume:  
73,110.00
Canada | Oil, Gas & Consumable Fuels
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PFC.V WACC - Weighted Average Cost of Capital

The WACC of PetroFrontier Corp (PFC.V) is 6.0%.

The Cost of Equity of PetroFrontier Corp (PFC.V) is 13.20%.
The Cost of Debt of PetroFrontier Corp (PFC.V) is 5.00%.

Range Selected
Cost of equity 9.30% - 17.10% 13.20%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.1% - 7.0% 6.0%
WACC

PFC.V WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.07 2.01
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.30% 17.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 3.01 3.01
Cost of debt 5.00% 5.00%
After-tax WACC 5.1% 7.0%
Selected WACC 6.0%

PFC.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 PFC.V:

cost_of_equity (13.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.07) + 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.