TNZ.TO WACC - Weighted Average Cost of Capital

The WACC of Tenaz Energy Corp (TNZ.TO) is 16.4%.

The Cost of Equity of Tenaz Energy Corp (TNZ.TO) is 9.40%.

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

	Range	Selected
Cost of equity	7.90% - 10.90%	9.40%
Tax rate	9.70% - 17.30%	13.50%
Cost of debt	7.00% - 125.20%	66.10%
WACC	7.7% - 25.2%	16.4%

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	0.93	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.90%

Tax rate	9.70%	17.30%
Debt/Equity ratio	0.18	0.18
Cost of debt	7.00%	125.20%

After-tax WACC	7.7%	25.2%


Selected WACC	16.4%

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 (9.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.93) + 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.