TNZ.TO
Tenaz Energy Corp
Price:  
19.81 
CAD
Volume:  
18,014.00
Canada | Oil, Gas & Consumable Fuels
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TNZ.TO WACC - Weighted Average Cost of Capital

The WACC of Tenaz Energy Corp (TNZ.TO) is 19.2%.

The Cost of Equity of Tenaz Energy Corp (TNZ.TO) is 10.35%.
The Cost of Debt of Tenaz Energy Corp (TNZ.TO) is 66.10%.

Range Selected
Cost of equity 8.80% - 11.90% 10.35%
Tax rate 9.70% - 17.30% 13.50%
Cost of debt 7.00% - 125.20% 66.10%
WACC 8.3% - 30.1% 19.2%
WACC

TNZ.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.12 1.27
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.90%
Tax rate 9.70% 17.30%
Debt/Equity ratio 0.25 0.25
Cost of debt 7.00% 125.20%
After-tax WACC 8.3% 30.1%
Selected WACC 19.2%

TNZ.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 TNZ.TO:

cost_of_equity (10.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.12) + 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.