AXU.TO
Alexco Resource Corp
Price:  
0.65 
CAD
Volume:  
118,899.00
Canada | Commercial Services & Supplies
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AXU.TO WACC - Weighted Average Cost of Capital

The WACC of Alexco Resource Corp (AXU.TO) is 7.2%.

The Cost of Equity of Alexco Resource Corp (AXU.TO) is 7.35%.
The Cost of Debt of Alexco Resource Corp (AXU.TO) is 7.00%.

Range Selected
Cost of equity 5.80% - 8.90% 7.35%
Tax rate 18.00% - 22.20% 20.10%
Cost of debt 7.00% - 7.00% 7.00%
WACC 5.8% - 8.7% 7.2%
WACC

AXU.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.52 0.77
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 8.90%
Tax rate 18.00% 22.20%
Debt/Equity ratio 0.05 0.05
Cost of debt 7.00% 7.00%
After-tax WACC 5.8% 8.7%
Selected WACC 7.2%

AXU.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 AXU.TO:

cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.52) + 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.