PVAC
Penn Virginia Corp
Price:  
30.66 
USD
Volume:  
627,415.00
United States | Oil, Gas & Consumable Fuels
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PVAC WACC - Weighted Average Cost of Capital

The WACC of Penn Virginia Corp (PVAC) is 8.5%.

The Cost of Equity of Penn Virginia Corp (PVAC) is 9.20%.
The Cost of Debt of Penn Virginia Corp (PVAC) is 6.75%.

Range Selected
Cost of equity 7.20% - 11.20% 9.20%
Tax rate 0.50% - 1.60% 1.05%
Cost of debt 4.50% - 9.00% 6.75%
WACC 6.4% - 10.6% 8.5%
WACC

PVAC WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.94 1.34
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 11.20%
Tax rate 0.50% 1.60%
Debt/Equity ratio 0.38 0.38
Cost of debt 4.50% 9.00%
After-tax WACC 6.4% 10.6%
Selected WACC 8.5%

PVAC'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 PVAC:

cost_of_equity (9.20%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.94) + 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.