SHG.L WACC - Weighted Average Cost of Capital
The WACC of Shanta Gold Ltd (SHG.L) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.5% - 8.6% | 7.55% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 4.7% - 10.0% | 7.35% |
| WACC | 6.1% - 8.5% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.41 | 0.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 8.6% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 4.7% | 10.0% |
| After-tax WACC | 6.1% | 8.5% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SHG.L | Shanta Gold Ltd | 0.13 | 0.32 | 0.29 |
| ALTN.L | Altyngold PLC | 0.43 | 0.32 | 0.24 |
| CGH.L | Chaarat Gold Holdings Ltd | 23.78 | 1.08 | 0.05 |
| CNG.L | China Nonferrous Gold Ltd | 57.36 | 1.31 | 0.03 |
| ENDO.ST | Endomines AB (publ) | 0.53 | 0.39 | 0.27 |
| GDP.L | Goldplat PLC | 0.13 | 0.96 | 0.87 |
| HUM.L | Hummingbird Resources PLC | 3.91 | 0.54 | 0.13 |
| SRB.L | Serabi Gold PLC | 0.04 | 0.09 | 0.08 |
| TSG.L | Trans-Siberian Gold PLC | 0.12 | 0.46 | 0.42 |
| XTR.L | Xtract Resources PLC | 0.01 | -0.19 | -0.19 |
| Low | High | |
| Unlevered beta | 0.11 | 0.25 |
| Relevered beta | 0.12 | 0.28 |
| Adjusted relevered beta | 0.41 | 0.52 |
SHG.L'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 SHG.L:
cost_of_equity (7.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.