TNZ.TO WACC - Weighted Average Cost of Capital

The WACC of Tenaz Energy Corp (TNZ.TO) is 10.2%.

The Cost of Equity of Tenaz Energy Corp (TNZ.TO) is 7.35%.

The Cost of Debt of Tenaz Energy Corp (TNZ.TO) is 67.40%.

	Range	Selected
Cost of equity	5.70% - 9.00%	7.35%
Tax rate	14.90% - 21.00%	17.95%
Cost of debt	6.30% - 128.50%	67.40%
WACC	5.7% - 14.8%	10.2%

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	0.5	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	9.00%

Tax rate	14.90%	21.00%
Debt/Equity ratio	0.07	0.07
Cost of debt	6.30%	128.50%

After-tax WACC	5.7%	14.8%


Selected WACC	10.2%

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 (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.5) + 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.