TOT.TO
Total Energy Services Inc
Price:  
13.33 
CAD
Volume:  
38,831.00
Canada | Energy Equipment & Services
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TOT.TO WACC - Weighted Average Cost of Capital

The WACC of Total Energy Services Inc (TOT.TO) is 8.1%.

The Cost of Equity of Total Energy Services Inc (TOT.TO) is 9.20%.
The Cost of Debt of Total Energy Services Inc (TOT.TO) is 5.50%.

Range Selected
Cost of equity 7.50% - 10.90% 9.20%
Tax rate 24.00% - 33.60% 28.80%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.6% - 9.6% 8.1%
WACC

TOT.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.85 1.11
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 10.90%
Tax rate 24.00% 33.60%
Debt/Equity ratio 0.26 0.26
Cost of debt 4.00% 7.00%
After-tax WACC 6.6% 9.6%
Selected WACC 8.1%

TOT.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 TOT.TO:

cost_of_equity (9.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.85) + 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.