MPVD.TO
Mountain Province Diamonds Inc
Price:  
0.07 
CAD
Volume:  
80,850.00
Canada | Metals & Mining
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MPVD.TO WACC - Weighted Average Cost of Capital

The WACC of Mountain Province Diamonds Inc (MPVD.TO) is 8.0%.

The Cost of Equity of Mountain Province Diamonds Inc (MPVD.TO) is 91.90%.
The Cost of Debt of Mountain Province Diamonds Inc (MPVD.TO) is 5.00%.

Range Selected
Cost of equity 70.60% - 113.20% 91.90%
Tax rate 5.00% - 7.30% 6.15%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 8.7% 8.0%
WACC

MPVD.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 13.22 17.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 70.60% 113.20%
Tax rate 5.00% 7.30%
Debt/Equity ratio 25.54 25.54
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 8.7%
Selected WACC 8.0%

MPVD.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 MPVD.TO:

cost_of_equity (91.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (13.22) + 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.