SGN.V WACC - Weighted Average Cost of Capital
The WACC of Scorpio Gold Corp (SGN.V) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.4% - 9.2% | 7.8% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 8.1% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.51 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 9.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 8.1% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SGN.V | Scorpio Gold Corp | 0.24 | 2.78 | 2.37 |
| AXM.V | AXMIN Inc | 0.06 | -1.13 | -1.08 |
| BAT.V | Batero Gold Corp | 0.16 | 0.64 | 0.57 |
| BRNE | Borneo Resource Investments Ltd | 169.41 | 0.72 | 0.01 |
| CVB.V | Compass Gold Corp | 0.03 | -0.26 | -0.26 |
| DYNR | Dynaresource Inc | 0.37 | 0.54 | 0.42 |
| GYPHQ | Gryphon Gold Corp | 607.93 | 0 | 0 |
| IMII | Inception Mining Inc | 0.8 | 1.62 | 1.02 |
| MAS.V | MAS Gold Corp | 0.03 | 1.72 | 1.68 |
| RDU.V | Radius Gold Inc | 0.01 | 1.87 | 1.86 |
| YRB.TO | Les Ressources Yorbeau Inc | 0 | 0.37 | 0.37 |
| Low | High | |
| Unlevered beta | 0.37 | 0.57 |
| Relevered beta | 0.27 | 0.57 |
| Adjusted relevered beta | 0.51 | 0.71 |
SGN.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 SGN.V:
cost_of_equity (7.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.51) + 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.