CEG.CN
Cerro Grande Mining Corp
Price:  
0.01 
CAD
Volume:  
13,000.00
Chile | Metals & Mining
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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.