The WACC of Matachewan Consolidated Mines Ltd (MCM.A.V) is 6.4%.
Range | Selected | |
Cost of equity | 5.8% - 8.1% | 6.95% |
Tax rate | 9.5% - 14.0% | 11.75% |
Cost of debt | 4.5% - 6.3% | 5.4% |
WACC | 5.4% - 7.5% | 6.4% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.38 | 0.54 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.8% | 8.1% |
Tax rate | 9.5% | 14.0% |
Debt/Equity ratio | 0.3 | 0.3 |
Cost of debt | 4.5% | 6.3% |
After-tax WACC | 5.4% | 7.5% |
Selected WACC | 6.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MCM.A.V | Matachewan Consolidated Mines Ltd | 0.3 | 0.1 | 0.08 |
DBRM | Daybreak Oil and Gas Inc | 36.67 | 1.52 | 0.05 |
FRU.TO | Freehold Royalties Ltd | 0.14 | 1.26 | 1.12 |
MCS.V | McChip Resources Inc | 0.2 | 0.58 | 0.49 |
STTX | Stratex Oil & Gas Holdings Inc | 60.27 | -0.72 | -0.01 |
TPC.V | Tenth Avenue Petroleum Corp | 0.04 | 0.54 | 0.52 |
TRSI | Trophy Resources Inc | 41.12 | 1.43 | 0.04 |
TRXO | Columbine Valley Resources Inc | 2.04 | 0.18 | 0.06 |
WCE.V | WesCan Energy Corp | 0.66 | 1.05 | 0.66 |
Low | High | |
Unlevered beta | 0.07 | 0.41 |
Relevered beta | 0.07 | 0.31 |
Adjusted relevered beta | 0.38 | 0.54 |
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 MCM.A.V:
cost_of_equity (6.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + 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.