VLE.TO
Valeura Energy Inc
Price:  
7.25 
CAD
Volume:  
124,825.00
Canada | Oil, Gas & Consumable Fuels
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VLE.TO WACC - Weighted Average Cost of Capital

The WACC of Valeura Energy Inc (VLE.TO) is 6.5%.

The Cost of Equity of Valeura Energy Inc (VLE.TO) is 6.75%.
The Cost of Debt of Valeura Energy Inc (VLE.TO) is 5.00%.

Range Selected
Cost of equity 5.20% - 8.30% 6.75%
Tax rate 2.00% - 7.50% 4.75%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.1% - 7.9% 6.5%
WACC

VLE.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.39 0.69
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.20% 8.30%
Tax rate 2.00% 7.50%
Debt/Equity ratio 0.13 0.13
Cost of debt 5.00% 5.00%
After-tax WACC 5.1% 7.9%
Selected WACC 6.5%

VLE.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 VLE.TO:

cost_of_equity (6.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.39) + 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.