STGO.TO
Steppe Gold Ltd
Price:  
0.84 
CAD
Volume:  
25,000.00
Mongolia | Metals & Mining
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STGO.TO WACC - Weighted Average Cost of Capital

The WACC of Steppe Gold Ltd (STGO.TO) is 16.1%.

The Cost of Equity of Steppe Gold Ltd (STGO.TO) is 12.30%.
The Cost of Debt of Steppe Gold Ltd (STGO.TO) is 22.20%.

Range Selected
Cost of equity 10.30% - 14.30% 12.30%
Tax rate 9.80% - 15.00% 12.40%
Cost of debt 7.00% - 37.40% 22.20%
WACC 8.1% - 24.1% 16.1%
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 1.41 1.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.30% 14.30%
Tax rate 9.80% 15.00%
Debt/Equity ratio 1.28 1.28
Cost of debt 7.00% 37.40%
After-tax WACC 8.1% 24.1%
Selected WACC 16.1%

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 (12.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.41) + 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.