The WACC of Tenth Avenue Petroleum Corp (TPC.V) is 6.1%.
Range | Selected | |
Cost of equity | 5.5% - 6.9% | 6.2% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.5% - 6.7% | 6.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.33 | 0.33 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.5% | 6.9% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.5% | 6.7% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TPC.V | Tenth Avenue Petroleum Corp | 0.05 | 0.89 | 0.86 |
AMAZ | Amazing Energy Oil and Gas Co | 621.81 | 1.07 | 0 |
DBRM | Daybreak Oil and Gas Inc | 36.67 | 1.51 | 0.05 |
EFIR | EGPI Firecreek Inc | 196.89 | -0.89 | -0.01 |
GASE | Gase Energy Inc | 2.02 | -0.65 | -0.26 |
STTX | Stratex Oil & Gas Holdings Inc | 60.27 | -0.68 | -0.02 |
WCE.V | WesCan Energy Corp | 0.88 | 1.45 | 0.88 |
WNWG | Wentworth Energy Inc | 254492.8 | 0 | 0 |
Low | High | |
Unlevered beta | 0 | 0.01 |
Relevered beta | 0 | 0 |
Adjusted relevered beta | 0.33 | 0.33 |
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 TPC.V:
cost_of_equity (6.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.