SNM.V WACC - Weighted Average Cost of Capital

The WACC of ShaMaran Petroleum Corp (SNM.V) is 12.8%.

The Cost of Equity of ShaMaran Petroleum Corp (SNM.V) is 12.20%.

The Cost of Debt of ShaMaran Petroleum Corp (SNM.V) is 14.25%.

	Range	Selected
Cost of equity	10.50% - 13.90%	12.20%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	12.90% - 15.60%	14.25%
WACC	11.2% - 14.4%	12.8%

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	1.3	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	13.90%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0.41	0.41
Cost of debt	12.90%	15.60%

After-tax WACC	11.2%	14.4%


Selected WACC	12.8%

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 (12.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.3) + 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.