PIPE.TO
Pipestone Energy Corp
Price:  
29.14 
CAD
Volume:  
225,842.00
Canada | Oil, Gas & Consumable Fuels
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PIPE.TO WACC - Weighted Average Cost of Capital

The WACC of Pipestone Energy Corp (PIPE.TO) is 9.3%.

The Cost of Equity of Pipestone Energy Corp (PIPE.TO) is 11.50%.
The Cost of Debt of Pipestone Energy Corp (PIPE.TO) is 5.00%.

Range Selected
Cost of equity 10.10% - 12.90% 11.50%
Tax rate 23.20% - 24.10% 23.65%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.3% - 10.3% 9.3%
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 1.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.10% 12.90%
Tax rate 23.20% 24.10%
Debt/Equity ratio 0.39 0.39
Cost of debt 5.00% 5.00%
After-tax WACC 8.3% 10.3%
Selected WACC 9.3%

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 (11.50%) = 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.