PAAS.TO
Pan American Silver Corp
Price:  
33.99 
CAD
Volume:  
195,089.00
Canada | Metals & Mining
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PAAS.TO WACC - Weighted Average Cost of Capital

The WACC of Pan American Silver Corp (PAAS.TO) is 10.4%.

The Cost of Equity of Pan American Silver Corp (PAAS.TO) is 10.80%.
The Cost of Debt of Pan American Silver Corp (PAAS.TO) is 8.85%.

Range Selected
Cost of equity 8.80% - 12.80% 10.80%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 4.10% - 13.60% 8.85%
WACC 8.3% - 12.6% 10.4%
WACC

PAAS.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.1 1.42
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 12.80%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.09 0.09
Cost of debt 4.10% 13.60%
After-tax WACC 8.3% 12.6%
Selected WACC 10.4%

PAAS.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 PAAS.TO:

cost_of_equity (10.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.1) + 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.