FL.V WACC - Weighted Average Cost of Capital
The WACC of Frontier Lithium Inc (FL.V) is 11.0%.
| Range | Selected | |
| Cost of equity | 9.4% - 12.6% | 11% |
| Tax rate | 1.2% - 2.5% | 1.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.4% - 12.6% | 11.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.09 | 1.26 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.4% | 12.6% |
| Tax rate | 1.2% | 2.5% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.4% | 12.6% |
| Selected WACC | 11.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FL.V | Frontier Lithium Inc | 0 | 1.21 | 1.21 |
| CUU.V | Copper Fox Metals Inc | 0 | 1.87 | 1.86 |
| ELO.V | Eloro Resources Ltd | 0 | 1.5 | 1.5 |
| ETG.TO | Entree Resources Ltd | 0.05 | 0.9 | 0.86 |
| FCC.V | First Cobalt Corp | 0.04 | 1.82 | 1.74 |
| FOM.V | Foran Mining Corp | 0.04 | 1.07 | 1.03 |
| FURY.TO | Fury Gold Mines Ltd | 0 | 1.32 | 1.32 |
| GWM.V | Galway Metals Inc | 0.01 | 1.79 | 1.78 |
| LA.V | Los Andes Copper Ltd | 0.08 | 0.24 | 0.22 |
| RCK.V | Rock Tech Lithium Inc | 0.01 | 0 | 0 |
| Low | High | |
| Unlevered beta | 1.14 | 1.39 |
| Relevered beta | 1.13 | 1.39 |
| Adjusted relevered beta | 1.09 | 1.26 |
FL.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 FL.V:
cost_of_equity (11.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.09) + 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.