FNV.TO
Franco-Nevada Corp
Price:  
229.66 
CAD
Volume:  
89,000.00
Canada | Metals & Mining
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FNV.TO WACC - Weighted Average Cost of Capital

The WACC of Franco-Nevada Corp (FNV.TO) is 7.2%.

The Cost of Equity of Franco-Nevada Corp (FNV.TO) is 10.95%.
The Cost of Debt of Franco-Nevada Corp (FNV.TO) is 4.25%.

Range Selected
Cost of equity 9.20% - 12.70% 10.95%
Tax rate 15.40% - 20.70% 18.05%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.3% - 8.1% 7.2%
WACC

FNV.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.18 1.39
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 12.70%
Tax rate 15.40% 20.70%
Debt/Equity ratio 1 1
Cost of debt 4.00% 4.50%
After-tax WACC 6.3% 8.1%
Selected WACC 7.2%

FNV.TO'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 FNV.TO:

cost_of_equity (10.95%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.18) + 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.