PSE.CN WACC - Weighted Average Cost of Capital

The WACC of Pasinex Resources Ltd (PSE.CN) is 8.7%.

The Cost of Equity of Pasinex Resources Ltd (PSE.CN) is 9.20%.

The Cost of Debt of Pasinex Resources Ltd (PSE.CN) is 5.50%.

	Range	Selected
Cost of equity	6.80% - 11.60%	9.20%
Tax rate	-% - 1.10%	0.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.5% - 11.0%	8.7%

WACC

PSE.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.72	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	11.60%

Tax rate	-%	1.10%
Debt/Equity ratio	0.14	0.14
Cost of debt	4.00%	7.00%

After-tax WACC	6.5%	11.0%


Selected WACC	8.7%

PSE.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 PSE.CN:

cost_of_equity (9.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.72) + 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.