LPK.V WACC - Weighted Average Cost of Capital
The WACC of Lupaka Gold Corp (LPK.V) is 6.1%.
| Range | Selected | |
| Cost of equity | 6.7% - 10.3% | 8.5% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.2% - 7.0% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.56 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 10.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.2% | 7.0% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LPK.V | Lupaka Gold Corp | 1.04 | 0.98 | 0.55 |
| ARQ.CN | Argo Gold Inc | 0.19 | 0.23 | 0.2 |
| ATX.V | Atex Resources Inc | 0.03 | 1.39 | 1.36 |
| PTX.CN | Platinex Inc | 0.02 | -1.84 | -1.81 |
| RAK.V | Rackla Metals Inc | 0 | 1.24 | 1.24 |
| WAR.V | Warrior Gold Inc | 0 | 0.49 | 0.49 |
| XGC.V | Xali Gold Corp | 0.01 | -0.48 | -0.47 |
| Low | High | |
| Unlevered beta | 0.32 | 0.53 |
| Relevered beta | 0.34 | 0.84 |
| Adjusted relevered beta | 0.56 | 0.89 |
LPK.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 LPK.V:
cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.