ELR.TO WACC - Weighted Average Cost of Capital

The WACC of Eastern Platinum Ltd (ELR.TO) is 7.9%.

The Cost of Equity of Eastern Platinum Ltd (ELR.TO) is 7.95%.

The Cost of Debt of Eastern Platinum Ltd (ELR.TO) is 6.85%.

	Range	Selected
Cost of equity	6.10% - 9.80%	7.95%
Tax rate	1.50% - 2.80%	2.15%
Cost of debt	6.70% - 7.00%	6.85%
WACC	6.1% - 9.6%	7.9%

WACC

ELR.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.58	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	9.80%

Tax rate	1.50%	2.80%
Debt/Equity ratio	0.06	0.06
Cost of debt	6.70%	7.00%

After-tax WACC	6.1%	9.6%


Selected WACC	7.9%

ELR.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 ELR.TO:

cost_of_equity (7.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.