ELR.TO WACC - Weighted Average Cost of Capital

The WACC of Eastern Platinum Ltd (ELR.TO) is 7.4%.

The Cost of Equity of Eastern Platinum Ltd (ELR.TO) is 7.45%.

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

	Range	Selected
Cost of equity	5.90% - 9.00%	7.45%
Tax rate	1.50% - 2.80%	2.15%
Cost of debt	6.70% - 7.00%	6.85%
WACC	5.9% - 8.8%	7.4%

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	0.53	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	9.00%

Tax rate	1.50%	2.80%
Debt/Equity ratio	0.07	0.07
Cost of debt	6.70%	7.00%

After-tax WACC	5.9%	8.8%


Selected WACC	7.4%

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 (7.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.