The WACC of Pan Global Resources Inc (PGZ.V) is 7.9%.
Range | Selected | |
Cost of equity | 10.6% - 13.8% | 12.2% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.1% - 8.7% | 7.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.32 | 1.46 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.6% | 13.8% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.1% | 8.7% |
Selected WACC | 7.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PGZ.V | Pan Global Resources Inc | 1.2 | 1.27 | 0.68 |
AVL.TO | Avalon Advanced Materials Inc | 0.33 | 1.88 | 1.52 |
CDPR.CN | Cerro De Pasco Resources Inc | 0.01 | 2.02 | 2 |
FT.TO | Fortune Minerals Ltd | 0.3 | 1.04 | 0.85 |
GZZ.V | Golden Valley Mines Ltd | 0 | 1.01 | 1.01 |
INV.TO | INV Metals Inc | 0.01 | 1.94 | 1.93 |
LR.V | Luminex Resources Corp | 0 | 0.31 | 0.31 |
NKL.V | Nickel 28 Capital Corp | 0.77 | 1.49 | 0.95 |
OM.V | Osisko Metals Inc | 0.2 | 0.98 | 0.85 |
SANP | Santo Mining Corp | 82.59 | 0 | 0 |
SX.CN | St-Georges Eco-Mining Corp | 0.09 | 0.4 | 0.37 |
Low | High | |
Unlevered beta | 0.85 | 0.95 |
Relevered beta | 1.48 | 1.69 |
Adjusted relevered beta | 1.32 | 1.46 |
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 PGZ.V:
cost_of_equity (12.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.32) + 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.