SCLT.V WACC - Weighted Average Cost of Capital
The WACC of Searchlight Resources Inc (SCLT.V) is 6.0%.
| Range | Selected | |
| Cost of equity | 6.6% - 10.2% | 8.4% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 6.9% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.54 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 10.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 6.9% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SCLT.V | Searchlight Resources Inc | 1.14 | 3.58 | 1.95 |
| AJN.CN | Ajn Resources Inc | 0.31 | -0.11 | -0.09 |
| CRUZ.CN | Cruz Cobalt Corp | 0.05 | 0.67 | 0.64 |
| GGAU.V | Gambier Gold Corp | 0 | 0.17 | 0.17 |
| NBRI | North Bay Resources Inc | 0.21 | 1.73 | 1.5 |
| RAYN.CN | Raindrop Ventures Inc | 0 | 1.01 | 1.01 |
| RMES | Red Metal Resources Ltd | 0.17 | 1.07 | 0.95 |
| ROCK.V | Rockridge Resources Ltd | 0.02 | 0.18 | 0.18 |
| SCV.CN | Scotch Creek Ventures Inc | 0.1 | -0.3 | -0.28 |
| SQX.CN | Squatex Energy and Ressources Inc | 0.15 | 0.19 | 0.17 |
| Low | High | |
| Unlevered beta | 0.18 | 0.77 |
| Relevered beta | 0.31 | 0.82 |
| Adjusted relevered beta | 0.54 | 0.88 |
SCLT.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 SCLT.V:
cost_of_equity (8.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.54) + 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.