The WACC of Amex Exploration Inc (AMX.V) is 7.6%.
Range | Selected | |
Cost of equity | 9.8% - 13.2% | 11.5% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.7% - 8.4% | 7.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.16 | 1.36 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.8% | 13.2% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.7% | 8.4% |
Selected WACC | 7.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AMX.V | Amex Exploration Inc | 0.81 | 1.67 | 1.05 |
BNAU.TO | Battle North Gold Corp | 0 | 1.74 | 1.74 |
FF.TO | First Mining Gold Corp | 0 | 0.86 | 0.86 |
GSV.TO | Gold Standard Ventures Corp | 0 | 0.81 | 0.81 |
ITR.V | Integra Resources Corp | 0.03 | 1.59 | 1.56 |
LIO.V | Lion One Metals Ltd | 0.44 | 1.23 | 0.93 |
ME.TO | Moneta Porcupine Mines Inc | 0 | 0.59 | 0.59 |
MKO.V | Mako Mining Corp | 0.02 | 0.95 | 0.94 |
OIII.V | O3 Mining Inc | 0.04 | -0.38 | -0.37 |
ORG.V | Orca Gold Inc | 0 | 0.53 | 0.53 |
STAL | Star Alliance International Corp | 2.61 | 0.45 | 0.15 |
Low | High | |
Unlevered beta | 0.81 | 0.93 |
Relevered beta | 1.24 | 1.54 |
Adjusted relevered beta | 1.16 | 1.36 |
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 AMX.V:
cost_of_equity (11.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.16) + 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.