The WACC of Corsa Coal Corp (CSO.V) is 8.8%.
Range | Selected | |
Cost of equity | 10.3% - 14.5% | 12.4% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 7.0% - 9.4% | 8.2% |
WACC | 7.4% - 10.2% | 8.8% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.26 | 1.57 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.3% | 14.5% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1.29 | 1.29 |
Cost of debt | 7.0% | 9.4% |
After-tax WACC | 7.4% | 10.2% |
Selected WACC | 8.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CSO.V | Corsa Coal Corp | 1.29 | 1.51 | 0.78 |
AMR | Alpha Metallurgical Resources Inc | 0 | 1.67 | 1.67 |
ARG.TO | Amerigo Resources Ltd | 0.04 | 1.1 | 1.07 |
CAD.V | Colonial Coal International Corp | 0 | 1.24 | 1.24 |
CAF.V | Canaf Investments Inc | 0 | 0.62 | 0.62 |
CNT.TO | Century Global Commodities Corp | 0.01 | 0.34 | 0.34 |
FEO.V | Oceanic Iron Ore Corp | 0.34 | 1.1 | 0.88 |
HCC | Warrior Met Coal Inc | 0.07 | 1.68 | 1.6 |
METC | Ramaco Resources Inc | 0.17 | -0.01 | -0.01 |
PVMCF | Pine Valley Mining Corp | 0.34 | 0 | 0 |
Low | High | |
Unlevered beta | 0.71 | 0.95 |
Relevered beta | 1.39 | 1.85 |
Adjusted relevered beta | 1.26 | 1.57 |
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 CSO.V:
cost_of_equity (12.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.26) + 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.