LUN.TO
Lundin Mining Corp
Price:  
15.89 
CAD
Volume:  
3,004,153.00
Canada | Metals & Mining
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LUN.TO WACC - Weighted Average Cost of Capital

The WACC of Lundin Mining Corp (LUN.TO) is 9.1%.

The Cost of Equity of Lundin Mining Corp (LUN.TO) is 9.65%.
The Cost of Debt of Lundin Mining Corp (LUN.TO) is 11.30%.

Range Selected
Cost of equity 8.00% - 11.30% 9.65%
Tax rate 37.90% - 44.00% 40.95%
Cost of debt 4.10% - 18.50% 11.30%
WACC 7.1% - 11.1% 9.1%
WACC

LUN.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.96 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 11.30%
Tax rate 37.90% 44.00%
Debt/Equity ratio 0.2 0.2
Cost of debt 4.10% 18.50%
After-tax WACC 7.1% 11.1%
Selected WACC 9.1%

LUN.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 LUN.TO:

cost_of_equity (9.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.96) + 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.