WTE.L
Westmount Energy Ltd
Price:  
0.50 
GBP
Volume:  
250,000.00
Jersey | Capital Markets
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WTE.L WACC - Weighted Average Cost of Capital

The WACC of Westmount Energy Ltd (WTE.L) is 5.9%.

The Cost of Equity of Westmount Energy Ltd (WTE.L) is 7.80%.
The Cost of Debt of Westmount Energy Ltd (WTE.L) is 5.00%.

Range Selected
Cost of equity 6.50% - 9.10% 7.80%
Tax rate 19.00% - 19.00% 19.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.3% - 6.6% 5.9%
WACC

WTE.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.42 0.59
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.50% 9.10%
Tax rate 19.00% 19.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.3% 6.6%
Selected WACC 5.9%

WTE.L'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 WTE.L:

cost_of_equity (7.80%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + 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.