SNM.V WACC - Weighted Average Cost of Capital

The WACC of ShaMaran Petroleum Corp (SNM.V) is 12.4%.

The Cost of Equity of ShaMaran Petroleum Corp (SNM.V) is 12.25%.

The Cost of Debt of ShaMaran Petroleum Corp (SNM.V) is 12.65%.

	Range	Selected
Cost of equity	10.30% - 14.20%	12.25%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	12.40% - 12.90%	12.65%
WACC	10.9% - 13.8%	12.4%

WACC

SNM.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.25	1.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	14.20%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0.47	0.47
Cost of debt	12.40%	12.90%

After-tax WACC	10.9%	13.8%


Selected WACC	12.4%

SNM.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 SNM.V:

cost_of_equity (12.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.25) + 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.