RBY.TO
Rubellite Energy Inc
Price:  
1.95 
CAD
Volume:  
1,575.00
Canada | Oil, Gas & Consumable Fuels
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RBY.TO WACC - Weighted Average Cost of Capital

The WACC of Rubellite Energy Inc (RBY.TO) is 8.4%.

The Cost of Equity of Rubellite Energy Inc (RBY.TO) is 11.75%.
The Cost of Debt of Rubellite Energy Inc (RBY.TO) is 5.00%.

Range Selected
Cost of equity 9.70% - 13.80% 11.75%
Tax rate 18.30% - 27.30% 22.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.3% - 9.5% 8.4%
WACC

RBY.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.28 1.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.70% 13.80%
Tax rate 18.30% 27.30%
Debt/Equity ratio 0.73 0.73
Cost of debt 5.00% 5.00%
After-tax WACC 7.3% 9.5%
Selected WACC 8.4%

RBY.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 RBY.TO:

cost_of_equity (11.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.28) + 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.