RGD.V WACC - Weighted Average Cost of Capital
The WACC of Reunion Gold Corp (RGD.V) is 9.3%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.7% | 9.35% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.0% - 10.7% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.8 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.0% | 10.7% |
| Selected WACC | 9.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RGD.V | Reunion Gold Corp | 0 | 0.87 | 0.87 |
| ALTA.V | Altamira Gold Corp | 0.01 | 0.56 | 0.55 |
| GRC.TO | Gold Springs Resource Corp | 0 | 0.26 | 0.26 |
| HAR.V | Harfang Exploration Inc | 0.02 | 1.26 | 1.24 |
| IVS.V | Inventus Mining Corp | 0.01 | -1.32 | -1.31 |
| KG.V | Klondike Gold Corp | 0.01 | 0.32 | 0.32 |
| MAE.V | Maritime Resources Corp | 0 | 0.86 | 0.86 |
| RML.V | Rusoro Mining Ltd | 0.12 | 1.24 | 1.14 |
| RPX.V | Red Pine Exploration Inc | 0 | 1.75 | 1.75 |
| TGM.V | Trillium Gold Mines Inc | 0.04 | 1.35 | 1.31 |
| Low | High | |
| Unlevered beta | 0.74 | 0.98 |
| Relevered beta | 0.7 | 0.94 |
| Adjusted relevered beta | 0.8 | 0.96 |
RGD.V'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 RGD.V:
cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.