NVO.TO
Novo Resources Corp
Price:  
0.11 
CAD
Volume:  
577,790.00
Canada | Metals & Mining
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NVO.TO WACC - Weighted Average Cost of Capital

The WACC of Novo Resources Corp (NVO.TO) is 10.3%.

The Cost of Equity of Novo Resources Corp (NVO.TO) is 10.35%.
The Cost of Debt of Novo Resources Corp (NVO.TO) is 5.00%.

Range Selected
Cost of equity 9.20% - 11.50% 10.35%
Tax rate 5.80% - 6.90% 6.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.2% - 11.4% 10.3%
WACC

NVO.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.19 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 11.50%
Tax rate 5.80% 6.90%
Debt/Equity ratio 0.01 0.01
Cost of debt 5.00% 5.00%
After-tax WACC 9.2% 11.4%
Selected WACC 10.3%

NVO.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 NVO.TO:

cost_of_equity (10.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.19) + 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.