SNV.V WACC - Weighted Average Cost of Capital
The WACC of Sonoro Energy Ltd (SNV.V) is 5.8%.
| Range | Selected | |
| Cost of equity | 3.8% - 8.1% | 5.95% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.8% - 7.9% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | -0.02 | 0.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.8% | 8.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.8% | 7.9% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SNV.V | Sonoro Energy Ltd | 0.04 | 0.75 | 0.73 |
| FECOF | FEC Resources Inc | 0.49 | -0.48 | -0.35 |
| FNRC | 1st NRG Corp | 320.29 | 0 | 0 |
| IFNY | Infinity Energy Resources Inc | 0.57 | 1.67 | 1.18 |
| IFR.V | International Frontier Resources Corp | 0.06 | 0.9 | 0.87 |
| JBR.CN | James Bay Resources Ltd | 0.51 | -1.78 | -1.3 |
| MAH.V | Marksmen Energy Inc | 1.21 | -1.38 | -0.73 |
| PCQ.V | Petrolympic Ltd | 0 | -0.96 | -0.95 |
| VRY.V | Petro Victory Energy Corp | 0.68 | -1.39 | -0.93 |
| Low | High | |
| Unlevered beta | -0.66 | -0.07 |
| Relevered beta | -0.52 | 0.3 |
| Adjusted relevered beta | -0.02 | 0.53 |
SNV.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 SNV.V:
cost_of_equity (5.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (-0.02) + 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.