TGL.TO WACC - Weighted Average Cost of Capital

The WACC of TransGlobe Energy Corp (TGL.TO) is 10.2%.

The Cost of Equity of TransGlobe Energy Corp (TGL.TO) is 10.30%.

The Cost of Debt of TransGlobe Energy Corp (TGL.TO) is 4.80%.

	Range	Selected
Cost of equity	9.00% - 11.60%	10.30%
Tax rate	37.30% - 48.00%	42.65%
Cost of debt	4.00% - 5.60%	4.80%
WACC	9.0% - 11.4%	10.2%

WACC

TGL.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.16	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.60%

Tax rate	37.30%	48.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	5.60%

After-tax WACC	9.0%	11.4%


Selected WACC	10.2%

TGL.TO'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 TGL.TO:

cost_of_equity (10.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.16) + 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.