STGO.TO WACC - Weighted Average Cost of Capital

The WACC of Steppe Gold Ltd (STGO.TO) is 16.7%.

The Cost of Equity of Steppe Gold Ltd (STGO.TO) is 10.25%.

The Cost of Debt of Steppe Gold Ltd (STGO.TO) is 28.80%.

	Range	Selected
Cost of equity	9.00% - 11.50%	10.25%
Tax rate	9.80% - 15.00%	12.40%
Cost of debt	20.20% - 37.40%	28.80%
WACC	13.1% - 20.4%	16.7%

WACC

STGO.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.16	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	11.50%

Tax rate	9.80%	15.00%
Debt/Equity ratio	0.78	0.78
Cost of debt	20.20%	37.40%

After-tax WACC	13.1%	20.4%


Selected WACC	16.7%

STGO.TO'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 STGO.TO:

cost_of_equity (10.25%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.16) + 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.