AOT.TO WACC - Weighted Average Cost of Capital

The WACC of Ascot Resources Ltd (AOT.TO) is 7.4%.

The Cost of Equity of Ascot Resources Ltd (AOT.TO) is 9.45%.

The Cost of Debt of Ascot Resources Ltd (AOT.TO) is 5.50%.

	Range	Selected
Cost of equity	8.10% - 10.80%	9.45%
Tax rate	2.30% - 5.00%	3.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.1% - 8.8%	7.4%

WACC

AOT.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.97	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.80%

Tax rate	2.30%	5.00%
Debt/Equity ratio	0.93	0.93
Cost of debt	4.00%	7.00%

After-tax WACC	6.1%	8.8%


Selected WACC	7.4%

AOT.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 AOT.TO:

cost_of_equity (9.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.97) + 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.