CEG.CN WACC - Weighted Average Cost of Capital

The WACC of Cerro Grande Mining Corp (CEG.CN) is 4.5%.

The Cost of Equity of Cerro Grande Mining Corp (CEG.CN) is 6.45%.

The Cost of Debt of Cerro Grande Mining Corp (CEG.CN) is 5.00%.

	Range	Selected
Cost of equity	3.60% - 9.30%	6.45%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	3.7% - 5.3%	4.5%

WACC

CEG.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.09	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	3.60%	9.30%

Tax rate	25.90%	26.50%
Debt/Equity ratio	2.55	2.55
Cost of debt	5.00%	5.00%

After-tax WACC	3.7%	5.3%


Selected WACC	4.5%

CEG.CN'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 CEG.CN:

cost_of_equity (6.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.09) + 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.