Quote:
Originally Posted by Infinit47
Does anyone know about what the City's cost of capital is? I'm going to go out on a limb and say it's nowhere near this 1.8 IRR
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Municipalities can't issue debt in Alberta, the province runs borrowing programs through the Treasury. So you're looking at using the provinces cost of capital for these projects.
The last debt issuance in Alberta was done at a 4% coupon...the average yield to maturity of the portfolio of Alberta's debt is trading at 4.17% at the moment. Government's don't really raise equity, so you can use the current debt price as your cost of capital.
For conversation sake as there will be a bunch of O&G folks running around running NPV8 figures off their respective economic packages.
Fresh off Bloomberg:
CNQ WACC: 13.27%
VET WACC: 11.65%
Tourmaline: 12.57%
Suncor: 10.69%