EV.V
Erin Ventures Inc
Price:  
0.05 
CAD
Volume:  
29,620
Canada | Metals & Mining

EV.V WACC - Weighted Average Cost of Capital

The WACC of Erin Ventures Inc (EV.V) is 11.0%.

The Cost of Equity of Erin Ventures Inc (EV.V) is 11.05%.
The Cost of Debt of Erin Ventures Inc (EV.V) is 5%.

RangeSelected
Cost of equity9.6% - 12.5%11.05%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.0% - 5.0%5%
WACC9.6% - 12.4%11.0%
WACC

EV.V WACC calculation

CategoryLowHigh
Long-term bond rate4.2%4.7%
Equity market risk premium5.5%6.5%
Adjusted beta11.13
Additional risk adjustments0.0%0.5%
Cost of equity9.6%12.5%
Tax rate26.2%27.0%
Debt/Equity ratio
0.010.01
Cost of debt5.0%5.0%
After-tax WACC9.6%12.4%
Selected WACC11.0%

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.