ETU.V WACC - Weighted Average Cost of Capital
The WACC of E2Gold Inc (ETU.V) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.0% - 9.5% | 7.25% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 8.5% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.23 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 9.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 8.5% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ETU.V | E2Gold Inc | 0.2 | 3.57 | 3.11 |
| CBI.V | Colibri Resource Corp | 0.53 | -0.78 | -0.56 |
| CRES.CN | Crest Resources Inc | 0.01 | -1.71 | -1.7 |
| ETR.CN | Etruscus Resources Corp | 0.01 | 0.99 | 0.98 |
| FMN.V | Fidelity Minerals Corp | 0.12 | 1.47 | 1.36 |
| GOFF | Goff Corp | 0.84 | 1.39 | 0.86 |
| MCU.V | Mega Copper Ltd | 0.01 | 0.26 | 0.26 |
| RMRK | Rimrock Gold Corp | 1.25 | -0.65 | -0.34 |
| ROVR.V | Rover Metals Corp | 0.02 | 2.09 | 2.07 |
| VRDR | Verde Resources Inc | 0.01 | -0.38 | -0.38 |
| Low | High | |
| Unlevered beta | 0.02 | 0.91 |
| Relevered beta | -0.15 | 0.63 |
| Adjusted relevered beta | 0.23 | 0.75 |
ETU.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 ETU.V:
cost_of_equity (7.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.23) + 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.