NXE.TO
Nexgen Energy Ltd
Price:  
7.76 
CAD
Volume:  
336,713.00
Canada | Oil, Gas & Consumable Fuels
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NXE.TO WACC - Weighted Average Cost of Capital

The WACC of Nexgen Energy Ltd (NXE.TO) is 8.4%.

The Cost of Equity of Nexgen Energy Ltd (NXE.TO) is 8.80%.
The Cost of Debt of Nexgen Energy Ltd (NXE.TO) is 5.00%.

Range Selected
Cost of equity 7.50% - 10.10% 8.80%
Tax rate 1.40% - 1.80% 1.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.6% 8.4%
WACC

NXE.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.85 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 10.10%
Tax rate 1.40% 1.80%
Debt/Equity ratio 0.11 0.11
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.6%
Selected WACC 8.4%

NXE.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 NXE.TO:

cost_of_equity (8.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.85) + 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.