SAM.TO WACC - Weighted Average Cost of Capital
The WACC of Starcore International Mines Ltd (SAM.TO) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.1% - 8.6% | 7.35% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 8.3% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.58 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 8.6% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 8.3% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SAM.TO | Starcore International Mines Ltd | 0.05 | 1.85 | 1.78 |
| DYNR | Dynaresource Inc | 0.37 | 0.54 | 0.42 |
| GGA.TO | Goldgroup Mining Inc | 2.61 | -0.76 | -0.26 |
| GYPHQ | Gryphon Gold Corp | 607.93 | 0 | 0 |
| IMII | Inception Mining Inc | 0.8 | 1.62 | 1.02 |
| MCI.V | Minnova Corp | 0.03 | 0.35 | 0.34 |
| MIRL.CN | Minera IRL Ltd | 15.13 | -0.43 | -0.04 |
| MMY.V | Monument Mining Ltd | 0 | 1.02 | 1.02 |
| PX.V | Pelangio Exploration Inc | 0 | 0.78 | 0.77 |
| YRB.TO | Les Ressources Yorbeau Inc | 0 | 0.37 | 0.37 |
| Low | High | |
| Unlevered beta | 0.36 | 0.56 |
| Relevered beta | 0.37 | 0.58 |
| Adjusted relevered beta | 0.58 | 0.72 |
SAM.TO'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 SAM.TO:
cost_of_equity (7.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.58) + 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.