The WACC of Eagle Bay Resources Corp (EBR.CN) is 17.8%.
| Range | Selected | |
| Cost of equity | 28.80% - 34.90% | 31.85% |
| Tax rate | 25.90% - 26.50% | 26.20% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 16.3% - 19.3% | 17.8% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 5.01 | 5.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.80% | 34.90% |
| Tax rate | 25.90% | 26.50% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 16.3% | 19.3% |
| Selected WACC | 17.8% | |
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 EBR.CN:
cost_of_equity (31.85%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (5.01) + 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.