EV.V WACC - Weighted Average Cost of Capital
The WACC of Erin Ventures Inc (EV.V) is 11.0%.
| Range | Selected | |
| Cost of equity | 9.6% - 12.5% | 11.05% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.6% - 12.4% | 11.0% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 1 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.6% | 12.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.6% | 12.4% |
| Selected WACC | 11.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EV.V | Erin Ventures Inc | 0.01 | -0.39 | -0.39 |
| AL.V | Alx Resources Corp | 0.01 | -0.66 | -0.66 |
| CEM.V | Constantine Metal Resources Ltd | 0.07 | 1.4 | 1.33 |
| GTC.V | Getty Copper Inc | 0.22 | -0.91 | -0.78 |
| LION.CN | Global Li-Ion Graphite Corp | 0.57 | -0.83 | -0.58 |
| MLY.V | American CuMo Mining Corp | 1.09 | 1.05 | 0.59 |
| NCF.TO | Northcliff Resources Ltd | 0.81 | 2.2 | 1.39 |
| RG.V | Romios Gold Resources Inc | 0.02 | 0.73 | 0.71 |
| TEA.V | Tearlach Resources Ltd | 0.07 | 1.24 | 1.18 |
| VUL.V | Vulcan Minerals Inc | 1 | 1.29 | 0.75 |
| Low | High | |
| Unlevered beta | 0.2 | 0.73 |
| Relevered beta | 1 | 1.19 |
| Adjusted relevered beta | 1 | 1.13 |
EV.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 EV.V:
cost_of_equity (11.05%) = risk_free_rate (4.45%) + equity_risk_premium (6.00%) * 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.