PIPE.TO WACC - Weighted Average Cost of Capital

The WACC of Pipestone Energy Corp (PIPE.TO) is 9.4%.

The Cost of Equity of Pipestone Energy Corp (PIPE.TO) is 11.65%.

The Cost of Debt of Pipestone Energy Corp (PIPE.TO) is 5.00%.

	Range	Selected
Cost of equity	10.10% - 13.20%	11.65%
Tax rate	23.20% - 24.10%	23.65%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.4% - 10.5%	9.4%

WACC

PIPE.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.36	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	13.20%

Tax rate	23.20%	24.10%
Debt/Equity ratio	0.39	0.39
Cost of debt	5.00%	5.00%

After-tax WACC	8.4%	10.5%


Selected WACC	9.4%

PIPE.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 PIPE.TO:

cost_of_equity (11.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.36) + 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.