RMES.CN WACC - Weighted Average Cost of Capital

The WACC of Red Metal Resources Ltd (RMES.CN) is 19.6%.

The Cost of Equity of Red Metal Resources Ltd (RMES.CN) is 75.15%.

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

	Range	Selected
Cost of equity	68.30% - 82.00%	75.15%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	5.00% - 5.00%	5.00%
WACC	18.1% - 21.2%	19.6%

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	12.77	12.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	68.30%	82.00%

Tax rate	25.90%	26.50%
Debt/Equity ratio	3.48	3.48
Cost of debt	5.00%	5.00%

After-tax WACC	18.1%	21.2%


Selected WACC	19.6%

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 (75.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (12.77) + 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.