The WACC of Endurance Gold Corp (EDG.V) is 7.2%.
Range | Selected | |
Cost of equity | 8.9% - 12.6% | 10.75% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.3% - 8.1% | 7.2% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1 | 1.28 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.9% | 12.6% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.3% | 8.1% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
EDG.V | Endurance Gold Corp | 1 | 1.88 | 1.09 |
ACS.V | Archon Minerals Ltd | 0.98 | 0.72 | 0.42 |
ADZ.V | Adamera Minerals Corp | 0.07 | 0.39 | 0.37 |
BHT.V | Braveheart Resources Inc | 0.38 | 0.43 | 0.33 |
CMB.V | CMC Metals Ltd | 0.02 | 1.33 | 1.3 |
DFR.V | Diamond Fields Resources Inc | 0.98 | 1.16 | 0.68 |
IGO.V | Independence Gold Corp | 0.01 | 2.04 | 2.03 |
SAE.V | Sable Resources Ltd | 0 | 0.73 | 0.73 |
SB.V | Stratabound Minerals Corp | 0.59 | 0.09 | 0.07 |
TSD.V | Tsodilo Resources Ltd | 0.56 | 1.77 | 1.26 |
VGLD.V | Vangold Mining Corp | 0 | 0.95 | 0.95 |
Low | High | |
Unlevered beta | 0.68 | 0.95 |
Relevered beta | 1 | 1.42 |
Adjusted relevered beta | 1 | 1.28 |
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 EDG.V:
cost_of_equity (10.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1) + 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.