NXS.V WACC - Weighted Average Cost of Capital
The WACC of Nexus Gold Corp (NXS.V) is 5.5%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.0% | 7.35% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.7% - 6.3% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.36 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.98 | 0.98 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.7% | 6.3% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NXS.V | Nexus Gold Corp | 0.98 | 3.63 | 2.11 |
| AOC.CN | Advantagewon Oil Corp | 0.08 | 1.87 | 1.76 |
| BJB.CN | Bond Resources Inc | 1.63 | -0.08 | -0.04 |
| HWY.V | Highway 50 Gold Corp | 0.07 | 0.26 | 0.25 |
| ITKO.CN | Idaho Champion Gold Mines Canada Inc | 0 | 0.04 | 0.04 |
| KTR.V | Kintavar Exploration Inc | 0.63 | 1.39 | 0.96 |
| LEXI.V | Lithium Energi Exploration Inc | 2.73 | 1.5 | 0.5 |
| OTS.H.V | Optimus Gold Corp | 0.08 | -0.59 | -0.56 |
| TOC.CN | Tocvan Ventures Corp | 0.02 | -0.14 | -0.14 |
| Low | High | |
| Unlevered beta | 0.08 | 0.45 |
| Relevered beta | 0.04 | 0.52 |
| Adjusted relevered beta | 0.36 | 0.68 |
NXS.V'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 NXS.V:
cost_of_equity (7.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.