GENM.TO WACC - Weighted Average Cost of Capital
The WACC of Generation Mining Ltd (GENM.TO) is 9.0%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.7% | 9.3% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 10.3% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.93 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.7% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 10.3% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GENM.TO | Generation Mining Ltd | 0.06 | 1.76 | 1.69 |
| CDPR.CN | Cerro De Pasco Resources Inc | 0.01 | 2.02 | 2 |
| CTGO | Contango ORE Inc | 0.4 | 0.83 | 0.64 |
| CYP.V | Cypress Development Corp | 0 | 1.26 | 1.25 |
| ETMC.V | E3 Metals Corp | 0 | 0.86 | 0.86 |
| FPX.V | FPX Nickel Corp | 0 | 0.86 | 0.86 |
| GZZ.V | Golden Valley Mines Ltd | 0 | 1.01 | 1.01 |
| MGR.V | Magna Gold Corp | 11.57 | 0.46 | 0.05 |
| MMS.V | Macarthur Minerals Ltd | 0.27 | 0.41 | 0.34 |
| NOT.V | Noront Resources Ltd | 0.1 | 1.2 | 1.12 |
| Low | High | |
| Unlevered beta | 0.86 | 1.06 |
| Relevered beta | 0.9 | 1.1 |
| Adjusted relevered beta | 0.93 | 1.07 |
GENM.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 GENM.TO:
cost_of_equity (9.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.93) + 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.