RMES.CN WACC - Weighted Average Cost of Capital

The WACC of Red Metal Resources Ltd (RMES.CN) is 17.6%.

The Cost of Equity of Red Metal Resources Ltd (RMES.CN) is 56.55%.

The Cost of Debt of Red Metal Resources Ltd (RMES.CN) is 5.00%.

	Range	Selected
Cost of equity	51.30% - 61.80%	56.55%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	16.3% - 19.0%	17.6%

WACC

RMES.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	9.44	9.44

Additional risk adjustments	0.0%	0.5%
Cost of equity	51.30%	61.80%

Tax rate	25.90%	26.50%
Debt/Equity ratio	2.79	2.79
Cost of debt	5.00%	5.00%

After-tax WACC	16.3%	19.0%


Selected WACC	17.6%

RMES.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 RMES.CN:

cost_of_equity (56.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (9.44) + 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.