The WACC of Jubilee Gold Exploration Ltd (JUB.V) is 6.1%.
Range | Selected | |
Cost of equity | 5.5% - 6.9% | 6.2% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.5% - 6.8% | 6.1% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.33 | 0.33 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.5% | 6.9% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.04 | 0.04 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.5% | 6.8% |
Selected WACC | 6.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
JUB.V | Jubilee Gold Exploration Ltd | 0.04 | -0.03 | -0.03 |
CSG.H.V | Cosigo Resources Ltd | 0.02 | 1.63 | 1.61 |
GBE.V | Lifestyle Global Brands Ltd | 1.57 | 1.04 | 0.48 |
GDX.V | Goldex Resources Corp | 0.53 | -1.53 | -1.1 |
HNDI | Handeni Gold Inc | 8.25 | -6806.73 | -968.96 |
RBYC | Ruby Creek Resources Inc | 0 | 0 | 0 |
RTG.TO | RTG Mining Inc | 0.01 | -1.78 | -1.77 |
VAX.V | Vantex Resources Ltd | 0.3 | -0.56 | -0.46 |
Low | High | |
Unlevered beta | -0.59 | -0.03 |
Relevered beta | 0 | 0 |
Adjusted relevered beta | 0.33 | 0.33 |
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 JUB.V:
cost_of_equity (6.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.