PRUD.CN WACC - Weighted Average Cost of Capital

The WACC of Prudent Minerals Corp (PRUD.CN) is 14.9%.

The Cost of Equity of Prudent Minerals Corp (PRUD.CN) is 23.90%.

The Cost of Debt of Prudent Minerals Corp (PRUD.CN) is 5.00%.

	Range	Selected
Cost of equity	21.60% - 26.20%	23.90%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	13.6% - 16.2%	14.9%

WACC

PRUD.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	3.61	3.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	21.60%	26.20%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.8	0.8
Cost of debt	5.00%	5.00%

After-tax WACC	13.6%	16.2%


Selected WACC	14.9%

PRUD.CN'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 PRUD.CN:

cost_of_equity (23.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (3.61) + 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.