The WACC of Pacton Gold Inc (PAC.V) is 8.9%.
Range | Selected | |
Cost of equity | 7.7% - 10.6% | 9.15% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.5% - 10.3% | 8.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.75 | 0.93 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 10.6% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.5% | 10.3% |
Selected WACC | 8.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PAC.V | Pacton Gold Inc | 0.05 | 0.89 | 0.86 |
ANK.V | Angkor Resources Corp | 0.18 | -0.84 | -0.75 |
AVG.V | Avidian Gold Corp | 0.1 | 0.65 | 0.6 |
CCHI | Cambridge Capital Holdings Inc | 0.71 | 0.05 | 0.04 |
GRC.TO | Gold Springs Resource Corp | 0 | 0.61 | 0.61 |
HAR.V | Harfang Exploration Inc | 0.01 | 1.55 | 1.53 |
ITEC | InterTech Solutions Inc | 0.24 | 0 | 0 |
KES.V | Kesselrun Resources Ltd | 0.03 | 0.9 | 0.89 |
RML.V | Rusoro Mining Ltd | 0.15 | 1.34 | 1.21 |
RPX.V | Red Pine Exploration Inc | 0.01 | 1.65 | 1.64 |
Low | High | |
Unlevered beta | 0.61 | 0.87 |
Relevered beta | 0.63 | 0.9 |
Adjusted relevered beta | 0.75 | 0.93 |
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 PAC.V:
cost_of_equity (9.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.