CPG.TO WACC - Weighted Average Cost of Capital

The WACC of Crescent Point Energy Corp (CPG.TO) is 7.5%.

The Cost of Equity of Crescent Point Energy Corp (CPG.TO) is 9.80%.

The Cost of Debt of Crescent Point Energy Corp (CPG.TO) is 4.75%.

	Range	Selected
Cost of equity	8.70% - 10.90%	9.80%
Tax rate	25.00% - 25.50%	25.25%
Cost of debt	4.10% - 5.40%	4.75%
WACC	6.6% - 8.4%	7.5%

WACC

CPG.TO WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.06	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	10.90%

Tax rate	25.00%	25.50%
Debt/Equity ratio	0.57	0.57
Cost of debt	4.10%	5.40%

After-tax WACC	6.6%	8.4%


Selected WACC	7.5%

CPG.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 CPG.TO:

cost_of_equity (9.80%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (1.06) + 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.