PA.V WACC - Weighted Average Cost of Capital
The WACC of Palamina Corp (PA.V) is 7.3%.
| Range | Selected | |
| Cost of equity | 8.9% - 13.0% | 10.95% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.3% - 8.3% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.99 | 1.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 13.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.3% | 8.3% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PA.V | Palamina Corp | 0.97 | 0.5 | 0.29 |
| AAN.V | Aton Resources Inc | 0.46 | -0.18 | -0.14 |
| AFF.V | Affinity Metals Corp | 0.1 | 0.27 | 0.25 |
| CDU.V | Cardero Resource Corp | 0.09 | 1.89 | 1.78 |
| CML.V | CaNickel Mining Ltd | 108.73 | -0.7 | -0.01 |
| FEX.V | Fjordland Exploration Inc | 0.03 | 0.8 | 0.78 |
| JOR.V | Ressources Jourdan Inc | 0.01 | 0.19 | 0.18 |
| MWX.V | Mineworx Technologies Ltd | 0.08 | 0.83 | 0.78 |
| SZM.V | ScoZinc Mining Ltd | 0 | 1.87 | 1.86 |
| TRO.V | Taranis Resources Inc | 0.01 | 0.99 | 0.99 |
| XMG.CN | MGX Minerals Inc | 0.52 | 1.46 | 1.05 |
| Low | High | |
| Unlevered beta | 0.29 | 0.78 |
| Relevered beta | 0.99 | 1.49 |
| Adjusted relevered beta | 0.99 | 1.33 |
PA.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 PA.V:
cost_of_equity (10.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.99) + 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.