AQA.TO WACC - Weighted Average Cost of Capital
The WACC of Aquila Resources Inc (AQA.TO) is 10.1%.
| Range | Selected | |
| Cost of equity | 8.4% - 12.0% | 10.2% |
| Tax rate | 26.5% - 26.5% | 26.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 11.9% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.07 | 1.34 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 12.0% |
| Tax rate | 26.5% | 26.5% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 11.9% |
| Selected WACC | 10.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AQA.TO | Aquila Resources Inc | 0.02 | 0.88 | 0.87 |
| BLLG.CN | Blue Lagoon Resources Inc | 0.82 | -0.47 | -0.29 |
| CGLD | Buscar Co | 0.04 | 1.49 | 1.45 |
| ENDR.V | Enduro Metals Corp | 0.05 | 0.88 | 0.84 |
| GIGA.V | Giga Metals Corp | 0.01 | 1.17 | 1.16 |
| GMA.V | Geomega Resources Inc | 0.13 | 2.51 | 2.3 |
| HUD.V | Hudson Resources Inc | 0.04 | 0.64 | 0.62 |
| NCP.TO | Nickel Creek Platinum Corp | 0.02 | 2.75 | 2.71 |
| SME.V | Sama Resources Inc | 1.14 | -0.28 | -0.15 |
| SMY.V | Search Minerals Inc | 0.15 | -1.27 | -1.14 |
| Low | High | |
| Unlevered beta | 0.75 | 0.98 |
| Relevered beta | 1.1 | 1.51 |
| Adjusted relevered beta | 1.07 | 1.34 |
AQA.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 AQA.TO:
cost_of_equity (10.20%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (1.07) + 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.