PZQA.IR WACC - Weighted Average Cost of Capital
The WACC of Providence Resources PLC (PZQA.IR) is 8.0%.
| Range | Selected | |
| Cost of equity | 7.5% - 15.7% | 11.6% |
| Tax rate | 12.5% - 12.5% | 12.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 10.0% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 6.4% | 7.4% |
| Adjusted beta | 0.71 | 1.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 15.7% |
| Tax rate | 12.5% | 12.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 10.0% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PZQA.IR | Providence Resources PLC | 1.06 | 0 | 0 |
| BPC.L | Bahamas Petroleum Company PLC | 0.01 | 1.67 | 1.65 |
| CHAR.L | Chariot Oil and Gas Ltd | 0.02 | 1.54 | 1.51 |
| I3E.L | I3 Energy PLC | 0.23 | 0.23 | 0.19 |
| JOG.L | Jersey Oil and Gas PLC | 0 | 1.24 | 1.24 |
| P8ET.IR | Petroneft Resources PLC | 1.12 | -0.68 | -0.34 |
| PMG.L | Parkmead Group PLC | 0.08 | 1.45 | 1.36 |
| RKH.L | Rockhopper Exploration PLC | 0.03 | 1.43 | 1.39 |
| SEY.L | Sterling Energy PLC | 0.02 | 0.3 | 0.29 |
| SLE.L | San Leon Energy PLC | 0.03 | 2.73 | 2.66 |
| UOG.L | United Oil & Gas PLC | 0.63 | 0.67 | 0.43 |
| Low | High | |
| Unlevered beta | 0.43 | 1.36 |
| Relevered beta | 0.57 | 1.88 |
| Adjusted relevered beta | 0.71 | 1.59 |
PZQA.IR'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 PZQA.IR:
cost_of_equity (11.60%) = risk_free_rate (3.25%) + equity_risk_premium (6.90%) * 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.