RZE.V WACC - Weighted Average Cost of Capital
The WACC of Razor Energy Corp (RZE.V) is 6.6%.
| Range | Selected | |
| Cost of equity | 9.0% - 14.2% | 11.6% |
| Tax rate | 1.4% - 11.1% | 6.25% |
| Cost of debt | 5.2% - 7.0% | 6.1% |
| WACC | 5.8% - 7.5% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.94 | 1.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.0% | 14.2% |
| Tax rate | 1.4% | 11.1% |
| Debt/Equity ratio | 5.21 | 5.21 |
| Cost of debt | 5.2% | 7.0% |
| After-tax WACC | 5.8% | 7.5% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RZE.V | Razor Energy Corp | 5.21 | 1.31 | 0.21 |
| AMRR | American Metals Recovery and Recycling Inc | 2.05 | -1.29 | -0.43 |
| AOC.CN | Advantagewon Oil Corp | 0.08 | 1.87 | 1.73 |
| BROE | Baron Energy Inc | 27728.1 | -1.12 | 0 |
| DDRIQ | Diversified Resources Inc | 1.47 | 1.08 | 0.44 |
| IRO.V | Inter Rock Minerals Inc | 0.37 | -0.14 | -0.1 |
| KTR.V | Kintavar Exploration Inc | 0.63 | 1.39 | 0.86 |
| LUX.CN | Newlox Gold Ventures Corp | 0.43 | -0.88 | -0.62 |
| OIL.CN | Permex Petroleum Corp | 2.15 | 0.8 | 0.26 |
| Low | High | |
| Unlevered beta | 0.04 | 0.25 |
| Relevered beta | 0.91 | 1.72 |
| Adjusted relevered beta | 0.94 | 1.48 |
RZE.V'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 RZE.V:
cost_of_equity (11.60%) = risk_free_rate (4.45%) + equity_risk_premium (5.60%) * 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.