The WACC of International Cobalt Corp (CO.CN) is 5.6%.
Range | Selected | |
Cost of equity | 5.6% - 9.4% | 7.5% |
Tax rate | 25.9% - 26.5% | 26.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.7% - 6.6% | 5.6% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.49 | 0.86 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.6% | 9.4% |
Tax rate | 25.9% | 26.5% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.7% | 6.6% |
Selected WACC | 5.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CO.CN | International Cobalt Corp | 1.12 | 2.67 | 1.47 |
AAN.V | Aton Resources Inc | 0.37 | -0.33 | -0.26 |
AFF.V | Affinity Metals Corp | 0.1 | 0.27 | 0.25 |
BAY.V | Aston Bay Holdings Ltd | 0.05 | 1.11 | 1.07 |
CBA.V | Champion Bear Resources Ltd | 0.36 | -1.32 | -1.04 |
CMD.V | Commander Resources Ltd | 0.01 | 0.65 | 0.64 |
FEX.V | Fjordland Exploration Inc | 0.97 | 0.53 | 0.31 |
MAC.V | THEMAC Resources Group Ltd | 24.44 | 2.01 | 0.11 |
RMD.V | Richmond Minerals Inc | 0.33 | 0.11 | 0.09 |
SZM.V | ScoZinc Mining Ltd | 0 | 1.87 | 1.86 |
Low | High | |
Unlevered beta | 0.19 | 0.44 |
Relevered beta | 0.24 | 0.79 |
Adjusted relevered beta | 0.49 | 0.86 |
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 CO.CN:
cost_of_equity (7.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + 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.