ITH.TO WACC - Weighted Average Cost of Capital
The WACC of International Tower Hill Mines Ltd (ITH.TO) is 8.0%.
| Range | Selected | |
| Cost of equity | 10.0% - 14.5% | 12.25% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 9.1% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.34 | 1.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 14.5% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 9.1% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ITH.TO | International Tower Hill Mines Ltd | 0.99 | 0.93 | 0.54 |
| ARIS.TO | Aris Gold Corp | 0.43 | 1.2 | 0.91 |
| BNAU.TO | Battle North Gold Corp | 0 | 1.74 | 1.74 |
| FVL.TO | Freegold Ventures Ltd | 0 | 1.41 | 1.41 |
| GAU.TO | Galiano Gold Inc | 0.11 | 1.1 | 1.01 |
| GOLD.TO | GoldMining Inc | 0 | 0.78 | 0.78 |
| GSV.TO | Gold Standard Ventures Corp | 0 | 0.81 | 0.81 |
| KOR.TO | Corvus Gold Inc | 0.01 | 1.45 | 1.44 |
| MKO.V | Mako Mining Corp | 0.02 | 0.81 | 0.79 |
| ORE.V | Orezone Gold Corp | 0 | 0.61 | 0.61 |
| RIO.V | Rio2 Ltd | 0 | 1.63 | 1.63 |
| Low | High | |
| Unlevered beta | 0.81 | 1.01 |
| Relevered beta | 1.51 | 2.03 |
| Adjusted relevered beta | 1.34 | 1.69 |
ITH.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 ITH.TO:
cost_of_equity (12.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.34) + 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.