The WACC of Silver Range Resources Ltd (SNG.V) is 8.8%.
Range | Selected | |
Cost of equity | 11.7% - 16.2% | 13.95% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.7% - 9.9% | 8.8% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.53 | 1.85 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.7% | 16.2% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.7% | 9.9% |
Selected WACC | 8.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SNG.V | Silver Range Resources Ltd | 1.09 | -0.3 | -0.17 |
BEX.V | Benton Resources Inc | 0 | 1.27 | 1.27 |
CMX.V | Chilean Metals Inc | 0.05 | 1.49 | 1.44 |
COR.V | Camino Minerals Corp | 0 | 0.69 | 0.69 |
DJI.V | Dajin Resources Corp | 0.01 | 0.42 | 0.42 |
GRDM.V | Grid Metals Corp | 0.07 | -0.6 | -0.57 |
MON.V | Montero Mining and Exploration Ltd | 0.01 | 0.03 | 0.03 |
MTS.V | Metallis Resources Inc | 0 | 1.54 | 1.54 |
QEX.V | QuestEx Gold & Copper Ltd | 0 | 1.35 | 1.35 |
RCLF.CN | Rockcliff Metals Corp | 0 | 1.29 | 1.29 |
WCC.V | Consolidated Woodjam Copper Corp | 0.01 | 1.74 | 1.73 |
Low | High | |
Unlevered beta | 0.69 | 1.29 |
Relevered beta | 1.79 | 2.27 |
Adjusted relevered beta | 1.53 | 1.85 |
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 SNG.V:
cost_of_equity (13.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.53) + 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.