LUM.V WACC - Weighted Average Cost of Capital
The WACC of Lumina Gold Corp (LUM.V) is 10.6%.
| Range | Selected | |
| Cost of equity | 8.6% - 12.5% | 10.55% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.6% - 12.5% | 10.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.94 | 1.26 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 12.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.6% | 12.5% |
| Selected WACC | 10.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LUM.V | Lumina Gold Corp | 0 | 1.47 | 1.47 |
| ARIS.TO | Aris Gold Corp | 0.47 | 1.3 | 0.97 |
| BNAU.TO | Battle North Gold Corp | 0 | 1.74 | 1.74 |
| FVL.TO | Freegold Ventures Ltd | 0 | 1.35 | 1.35 |
| GOLD.TO | GoldMining Inc | 0 | 0.72 | 0.72 |
| 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 | 1.53 | 1.53 |
| Low | High | |
| Unlevered beta | 0.9 | 1.38 |
| Relevered beta | 0.91 | 1.39 |
| Adjusted relevered beta | 0.94 | 1.26 |
LUM.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 LUM.V:
cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.94) + 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.