The WACC of Euro Ressources SA (EUR.PA) is 4.7%.
Range | Selected | |
Cost of equity | 5.1% - 7.1% | 6.1% |
Tax rate | 31.5% - 33.3% | 32.4% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.3% - 5.2% | 4.7% |
Category | Low | High |
Long-term bond rate | 3.0% | 3.5% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.37 | 0.46 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.1% | 7.1% |
Tax rate | 31.5% | 33.3% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.3% | 5.2% |
Selected WACC | 4.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
EUR.PA | Euro Ressources SA | 1.04 | -0.09 | -0.06 |
ALTN.L | Altyngold PLC | 0.31 | 0.22 | 0.18 |
CGH.L | Chaarat Gold Holdings Ltd | 23.59 | 1.08 | 0.06 |
CNG.L | China Nonferrous Gold Ltd | 56.92 | 1.31 | 0.03 |
ENDO.ST | Endomines AB (publ) | 0.53 | 0.39 | 0.29 |
GDP.L | Goldplat PLC | 0.13 | 0.71 | 0.65 |
GRL.L | GoldStone Resources Ltd | 1.16 | -0.59 | -0.33 |
KOPY.ST | Kopy Goldfields AB (publ) | 4.08 | 0.13 | 0.04 |
SGZ.L | Scotgold Resources Ltd | 1.09 | -0.04 | -0.03 |
SRB.L | Serabi Gold PLC | 0.03 | -0.08 | -0.08 |
TSG.L | Trans-Siberian Gold PLC | 0.12 | 0.46 | 0.43 |
Low | High | |
Unlevered beta | 0.03 | 0.06 |
Relevered beta | 0.06 | 0.19 |
Adjusted relevered beta | 0.37 | 0.46 |
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 EUR.PA:
cost_of_equity (6.10%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.37) + 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.