RLG.CN WACC - Weighted Average Cost of Capital
The WACC of West Red Lake Gold Mines Inc (RLG.CN) is 5.6%.
| Range | Selected | |
| Cost of equity | 4.5% - 6.7% | 5.6% |
| Tax rate | 7.5% - 9.0% | 8.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 6.6% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.27 | 0.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.5% | 6.7% |
| Tax rate | 7.5% | 9.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 6.6% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RLG.CN | West Red Lake Gold Mines Inc | 0 | 2.19 | 2.18 |
| AOC.CN | Advantagewon Oil Corp | 0.08 | 1.87 | 1.74 |
| BJB.CN | Bond Resources Inc | 1.61 | -0.08 | -0.03 |
| HWY.V | Highway 50 Gold Corp | 0.07 | 0.25 | 0.23 |
| ITKO.CN | Idaho Champion Gold Mines Canada Inc | 0 | 0.04 | 0.04 |
| JSHG | Joshua Gold Resources Inc | 0.08 | -1.39 | -1.3 |
| LEXI.V | Lithium Energi Exploration Inc | 2.73 | 1.04 | 0.29 |
| OTS.H.V | Optimus Gold Corp | 0.09 | -0.57 | -0.53 |
| PSGR | Pershing Resources Company Inc | 0.02 | -0.61 | -0.6 |
| SGO.V | Sonoro Gold Corp | 0.16 | 2.04 | 1.79 |
| TOC.CN | Tocvan Ventures Corp | 0.02 | -0.19 | -0.19 |
| Low | High | |
| Unlevered beta | -0.03 | 0.23 |
| Relevered beta | -0.09 | 0.12 |
| Adjusted relevered beta | 0.27 | 0.41 |
RLG.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 RLG.CN:
cost_of_equity (5.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.27) + 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.