DSM.V
Deep South Resources Inc
Price:  
0.08 
CAD
Volume:  
154,000
Canada | Metals & Mining

DSM.V WACC - Weighted Average Cost of Capital

The WACC of Deep South Resources Inc (DSM.V) is 9.2%.

The Cost of Equity of Deep South Resources Inc (DSM.V) is 14.7%.
The Cost of Debt of Deep South Resources Inc (DSM.V) is 5%.

RangeSelected
Cost of equity12.4% - 17.0%14.7%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.0% - 5.0%5%
WACC8.1% - 10.3%9.2%
WACC

DSM.V WACC calculation

CategoryLowHigh
Long-term bond rate4.2%4.7%
Equity market risk premium5.5%6.5%
Adjusted beta1.51.81
Additional risk adjustments0.0%0.5%
Cost of equity12.4%17.0%
Tax rate26.2%27.0%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC8.1%10.3%
Selected WACC9.2%

DSM.V'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 DSM.V:

cost_of_equity (14.70%) = risk_free_rate (4.45%) + equity_risk_premium (6.00%) * adjusted_beta (1.5) + 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.