AUU.V WACC - Weighted Average Cost of Capital
The WACC of Gold79 Mines Ltd (AUU.V) is 6.7%.
| Range | Selected | |
| Cost of equity | 7.7% - 11.6% | 9.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.7% - 7.6% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.76 | 1.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 11.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.7% | 7.6% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AUU.V | Gold79 Mines Ltd | 1.11 | 2.29 | 1.27 |
| ADZ.V | Adamera Minerals Corp | 0.07 | 0.39 | 0.37 |
| BHT.V | Braveheart Resources Inc | 0.38 | 0.43 | 0.33 |
| CMB.V | CMC Metals Ltd | 0.02 | 1.33 | 1.3 |
| IGO.V | Independence Gold Corp | 0.01 | 2.04 | 2.03 |
| NAR.V | North Arrow Minerals Inc | 0.12 | -0.5 | -0.46 |
| OLV.V | Olivut Resources Ltd | 1.06 | 0.18 | 0.1 |
| PAN.V | Pangolin Diamonds Corp | 0.89 | 0 | 0 |
| Low | High | |
| Unlevered beta | 0.29 | 0.55 |
| Relevered beta | 0.64 | 1.16 |
| Adjusted relevered beta | 0.76 | 1.11 |
AUU.V'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 AUU.V:
cost_of_equity (9.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.76) + 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.