The WACC of Osisko Metals Inc (OM.V) is 9.7%.
| Range | Selected | |
| Cost of equity | 9.20% - 12.40% | 10.80% |
| Tax rate | 9.50% - 17.40% | 13.45% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 8.4% - 11.0% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.04 | 1.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.20% | 12.40% |
| Tax rate | 9.50% | 17.40% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 8.4% | 11.0% |
| Selected WACC | 9.7% | |
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 OM.V:
cost_of_equity (10.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.04) + 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.