SNM.V WACC - Weighted Average Cost of Capital

The WACC of ShaMaran Petroleum Corp (SNM.V) is 9.3%.

The Cost of Equity of ShaMaran Petroleum Corp (SNM.V) is 9.25%.

The Cost of Debt of ShaMaran Petroleum Corp (SNM.V) is 9.50%.

	Range	Selected
Cost of equity	6.80% - 11.70%	9.25%
Tax rate	0.40% - 0.50%	0.45%
Cost of debt	6.10% - 12.90%	9.50%
WACC	6.6% - 12.0%	9.3%

WACC

SNM.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.58	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	11.70%

Tax rate	0.40%	0.50%
Debt/Equity ratio	0.32	0.32
Cost of debt	6.10%	12.90%

After-tax WACC	6.6%	12.0%


Selected WACC	9.3%

SNM.V'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 SNM.V:

cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.