PNE.TO WACC - Weighted Average Cost of Capital

The WACC of Pine Cliff Energy Ltd (PNE.TO) is 8.0%.

The Cost of Equity of Pine Cliff Energy Ltd (PNE.TO) is 8.60%.

The Cost of Debt of Pine Cliff Energy Ltd (PNE.TO) is 7.95%.

	Range	Selected
Cost of equity	6.80% - 10.40%	8.60%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	7.00% - 8.90%	7.95%
WACC	6.4% - 9.5%	8.0%

WACC

PNE.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.71	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.40%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.3	0.3
Cost of debt	7.00%	8.90%

After-tax WACC	6.4%	9.5%


Selected WACC	8.0%

PNE.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 PNE.TO:

cost_of_equity (8.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.71) + 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.