The WACC of Luminex Resources Corp (LR.V) is 10.0%.
Range | Selected | |
Cost of equity | 8.6% - 11.5% | 10.05% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.6% - 11.4% | 10.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.93 | 1.08 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.6% | 11.5% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.6% | 11.4% |
Selected WACC | 10.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
LR.V | Luminex Resources Corp | 0 | 0.31 | 0.31 |
CDPR.CN | Cerro De Pasco Resources Inc | 0.01 | 2.02 | 2 |
ESM.TO | Euro Sun Mining Inc | 0.01 | 0.87 | 0.86 |
FT.TO | Fortune Minerals Ltd | 0.28 | 1.34 | 1.11 |
INV.TO | INV Metals Inc | 0.01 | 1.94 | 1.93 |
NKL.V | Nickel 28 Capital Corp | 1.21 | 1.71 | 0.91 |
OM.V | Osisko Metals Inc | 0.19 | 1.28 | 1.13 |
SANP | Santo Mining Corp | 82.59 | 0 | 0 |
SX.CN | St-Georges Eco-Mining Corp | 0.08 | 0.7 | 0.66 |
TSK.TO | Talisker Resources Ltd | 0.09 | 1.43 | 1.34 |
Low | High | |
Unlevered beta | 0.89 | 1.12 |
Relevered beta | 0.9 | 1.12 |
Adjusted relevered beta | 0.93 | 1.08 |
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 LR.V:
cost_of_equity (10.05%) = risk_free_rate (4.15%) + 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.