SHL.V WACC - Weighted Average Cost of Capital
The WACC of Spruce Ridge Resources Ltd (SHL.V) is 6.0%.
| Range | Selected | |
| Cost of equity | 6.2% - 10.5% | 8.35% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 7.1% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.46 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 10.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 7.1% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SHL.V | Spruce Ridge Resources Ltd | 0.9 | 0.47 | 0.29 |
| APN.V | Altiplano Metals Inc | 0.19 | 1.1 | 0.97 |
| C.V | Contact Gold Corp | 0 | 0.79 | 0.79 |
| COBC.V | Cobalt Blockchain Inc | 0.02 | 1.4 | 1.39 |
| EOX.TO | Euromax Resources Ltd | 2.85 | 0.26 | 0.08 |
| KWG.CN | KWG Resources Inc | 1.19 | 1.11 | 0.59 |
| MIS.CN | Mistango River Resources Inc | 0.03 | 0.22 | 0.21 |
| NAM.V | New Age Metals Inc | 0.01 | -0.3 | -0.3 |
| QMC.V | Qmc Quantum Minerals Corp | 0.03 | -1.43 | -1.4 |
| VRB.V | Vanadiumcorp Resource Inc | 0.63 | -0.22 | -0.15 |
| Low | High | |
| Unlevered beta | 0.16 | 0.41 |
| Relevered beta | 0.19 | 0.9 |
| Adjusted relevered beta | 0.46 | 0.93 |
SHL.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 SHL.V:
cost_of_equity (8.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.46) + 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.