DML.TO WACC - Weighted Average Cost of Capital
The WACC of Denison Mines Corp (DML.TO) is 7.9%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.2% | 7.95% |
| Tax rate | 4.2% - 7.9% | 6.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 9.2% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.69 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.2% |
| Tax rate | 4.2% | 7.9% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 9.2% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DML.TO | Denison Mines Corp | 0 | 2.79 | 2.79 |
| BSK.V | Blue Sky Uranium Corp | 0.01 | 0.3 | 0.3 |
| BULL.CN | Canadian Palladium Resources Inc | 0.09 | -0.36 | -0.33 |
| ISO.V | Isoenergy Ltd | 0.06 | 0.93 | 0.88 |
| MGA.TO | Mega Uranium Ltd | 0 | 2.09 | 2.08 |
| NRP | Natural Resource Partners LP | 0.11 | 0.63 | 0.57 |
| PLU.V | Plateau Energy Metals Inc | 0 | 1.6 | 1.6 |
| PTU.V | Purepoint Uranium Group Inc | 0 | -0.27 | -0.27 |
| UEX.TO | Uex Corp | 0 | 0.65 | 0.65 |
| URE.TO | Ur-Energy Inc | 0 | 1.3 | 1.29 |
| WWR | Westwater Resources Inc | 0 | 0.47 | 0.47 |
| Low | High | |
| Unlevered beta | 0.57 | 0.88 |
| Relevered beta | 0.54 | 0.75 |
| Adjusted relevered beta | 0.69 | 0.83 |
DML.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 DML.TO:
cost_of_equity (7.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.