ARG.TO WACC - Weighted Average Cost of Capital

The WACC of Amerigo Resources Ltd (ARG.TO) is 9.6%.

The Cost of Equity of Amerigo Resources Ltd (ARG.TO) is 10.05%.

The Cost of Debt of Amerigo Resources Ltd (ARG.TO) is 4.25%.

	Range	Selected
Cost of equity	8.00% - 12.10%	10.05%
Tax rate	37.50% - 43.70%	40.60%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.7% - 11.6%	9.6%

WACC

ARG.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.94	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	12.10%

Tax rate	37.50%	43.70%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	4.50%

After-tax WACC	7.7%	11.6%


Selected WACC	9.6%

ARG.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 ARG.TO:

cost_of_equity (10.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.94) + 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.