XEC
Cimarex Energy Co
Price:  
87.2 
USD
Volume:  
7,097,280
United States | Oil, Gas & Consumable Fuels

XEC WACC - Weighted Average Cost of Capital

The WACC of Cimarex Energy Co (XEC) is 7.6%.

The Cost of Equity of Cimarex Energy Co (XEC) is 8.65%.
The Cost of Debt of Cimarex Energy Co (XEC) is 4.25%.

RangeSelected
Cost of equity7.6% - 9.7%8.65%
Tax rate20.5% - 27.3%23.9%
Cost of debt4.0% - 4.5%4.25%
WACC6.8% - 8.5%7.6%
WACC

XEC WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta1.041.06
Additional risk adjustments0.0%0.5%
Cost of equity7.6%9.7%
Tax rate20.5%27.3%
Debt/Equity ratio
0.220.22
Cost of debt4.0%4.5%
After-tax WACC6.8%8.5%
Selected WACC7.6%

XEC'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 XEC:

cost_of_equity (8.65%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.04) + 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.