SMY.V WACC - Weighted Average Cost of Capital
The WACC of Search Minerals Inc (SMY.V) is 8.7%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.9% | 9.45% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.4% - 10.0% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.8 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.9% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.4% | 10.0% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SMY.V | Search Minerals Inc | 0.15 | -1.27 | -1.14 |
| AQA.TO | Aquila Resources Inc | 0.02 | 0.88 | 0.87 |
| CGLD | Buscar Co | 0.04 | 1.77 | 1.72 |
| CNX.V | Callinex Mines Inc | 0 | 0.07 | 0.07 |
| CUR.V | International Consolidated Uranium Inc | 0 | 1.69 | 1.69 |
| DAN.V | Arianne Phosphate Inc | 0.91 | 0.7 | 0.42 |
| ENDR.V | Enduro Metals Corp | 0.05 | 0.81 | 0.78 |
| GIGA.V | Giga Metals Corp | 0.02 | 0.94 | 0.93 |
| NGC.V | Northern Graphite Corp | 2.07 | 0.64 | 0.26 |
| VLI.V | Vision Lithium Inc | 0.01 | 1.31 | 1.31 |
| Low | High | |
| Unlevered beta | 0.64 | 0.89 |
| Relevered beta | 0.7 | 0.99 |
| Adjusted relevered beta | 0.8 | 0.99 |
SMY.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 SMY.V:
cost_of_equity (9.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.