TOT.TO WACC - Weighted Average Cost of Capital

The WACC of Total Energy Services Inc (TOT.TO) is 8.7%.

The Cost of Equity of Total Energy Services Inc (TOT.TO) is 10.25%.

The Cost of Debt of Total Energy Services Inc (TOT.TO) is 5.80%.

	Range	Selected
Cost of equity	8.70% - 11.80%	10.25%
Tax rate	24.00% - 33.60%	28.80%
Cost of debt	4.60% - 7.00%	5.80%
WACC	7.4% - 10.0%	8.7%

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	1.09	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	11.80%

Tax rate	24.00%	33.60%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.60%	7.00%

After-tax WACC	7.4%	10.0%


Selected WACC	8.7%

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 (10.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.09) + 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.