ZAZA WACC - Weighted Average Cost of Capital

The WACC of ZaZa Energy Corp (ZAZA) is 12.7%.

The Cost of Equity of ZaZa Energy Corp (ZAZA) is 82,214.90%.

The Cost of Debt of ZaZa Energy Corp (ZAZA) is 19.75%.

	Range	Selected
Cost of equity	14,049.30% - 150,380.50%	82,214.90%
Tax rate	22.10% - 45.90%	34.00%
Cost of debt	7.00% - 32.50%	19.75%
WACC	5.7% - 19.8%	12.7%

WACC

ZAZA WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	3053.35	26852.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	14,049.30%	150,380.50%

Tax rate	22.10%	45.90%
Debt/Equity ratio	67101.74	67101.74
Cost of debt	7.00%	32.50%

After-tax WACC	5.7%	19.8%


Selected WACC	12.7%

ZAZA'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 ZAZA:

cost_of_equity (82,214.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3053.35) + 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.