SCIR.L WACC - Weighted Average Cost of Capital
The WACC of Scirocco Energy PLC (SCIR.L) is 6.7%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.9% | 9.35% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 7.5% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.64 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.9% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 7.5% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SCIR.L | Scirocco Energy PLC | 1.01 | -1.15 | -0.63 |
| ANGS.L | Angus Energy PLC | 1.76 | -0.06 | -0.02 |
| AST.L | Ascent Resources PLC | 0.08 | 0.3 | 0.29 |
| CORO.L | Coro Energy Plc | 4.27 | -0.25 | -0.06 |
| EDR.L | Egdon Resources PLC | 0.04 | 1.04 | 1 |
| LOGP.L | Lansdowne Oil & Gas PLC | 0.7 | 0.9 | 0.57 |
| PNOR.OL | Petronor E&P Ltd | 0.03 | 0.98 | 0.96 |
| SQZ.L | Serica Energy PLC | 0.4 | 1.54 | 1.17 |
| TOM.L | TomCo Energy PLC | 0.26 | 0.41 | 0.34 |
| TRP.L | Tower Resources PLC | 0 | -1.25 | -1.25 |
| ZPHR.L | Zephyr Energy PLC | 0.33 | 0.26 | 0.2 |
| Low | High | |
| Unlevered beta | 0.2 | 0.34 |
| Relevered beta | 0.46 | 0.78 |
| Adjusted relevered beta | 0.64 | 0.85 |
SCIR.L'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 SCIR.L:
cost_of_equity (9.35%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.