PZQA.IR
Providence Resources PLC
Price:  
0.03 
EUR
Volume:  
192,532
Ireland | Oil, Gas & Consumable Fuels

PZQA.IR WACC - Weighted Average Cost of Capital

The WACC of Providence Resources PLC (PZQA.IR) is 8.0%.

The Cost of Equity of Providence Resources PLC (PZQA.IR) is 11.6%.
The Cost of Debt of Providence Resources PLC (PZQA.IR) is 5%.

RangeSelected
Cost of equity7.5% - 15.7%11.6%
Tax rate12.5% - 12.5%12.5%
Cost of debt5.0% - 5.0%5%
WACC5.9% - 10.0%8.0%
WACC

PZQA.IR WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium6.4%7.4%
Adjusted beta0.711.59
Additional risk adjustments0.0%0.5%
Cost of equity7.5%15.7%
Tax rate12.5%12.5%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC5.9%10.0%
Selected WACC8.0%

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.