NLR.CN WACC - Weighted Average Cost of Capital

The WACC of Northern Lights Resources Corp (NLR.CN) is 7.3%.

The Cost of Equity of Northern Lights Resources Corp (NLR.CN) is 8.65%.

The Cost of Debt of Northern Lights Resources Corp (NLR.CN) is 5.00%.

	Range	Selected
Cost of equity	7.70% - 9.60%	8.65%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.6% - 8.1%	7.3%

WACC

NLR.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.89	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	9.60%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.36	0.36
Cost of debt	5.00%	5.00%

After-tax WACC	6.6%	8.1%


Selected WACC	7.3%

NLR.CN'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 NLR.CN:

cost_of_equity (8.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.89) + 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.