NDM.TO WACC - Weighted Average Cost of Capital

The WACC of Northern Dynasty Minerals Ltd (NDM.TO) is 12.1%.

The Cost of Equity of Northern Dynasty Minerals Ltd (NDM.TO) is 12.15%.

The Cost of Debt of Northern Dynasty Minerals Ltd (NDM.TO) is 5.00%.

	Range	Selected
Cost of equity	10.40% - 13.90%	12.15%
Tax rate	0.10% - 0.30%	0.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	10.4% - 13.9%	12.1%

WACC

NDM.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.42	1.6

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	13.90%

Tax rate	0.10%	0.30%
Debt/Equity ratio	0	0
Cost of debt	5.00%	5.00%

After-tax WACC	10.4%	13.9%


Selected WACC	12.1%

NDM.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 NDM.TO:

cost_of_equity (12.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.42) + 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.