STGO.TO WACC - Weighted Average Cost of Capital

The WACC of Steppe Gold Ltd (STGO.TO) is 13.5%.

The Cost of Equity of Steppe Gold Ltd (STGO.TO) is 10.55%.

The Cost of Debt of Steppe Gold Ltd (STGO.TO) is 22.10%.

	Range	Selected
Cost of equity	9.00% - 12.10%	10.55%
Tax rate	9.80% - 15.00%	12.40%
Cost of debt	6.80% - 37.40%	22.10%
WACC	8.0% - 19.0%	13.5%

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	1.14	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	12.10%

Tax rate	9.80%	15.00%
Debt/Equity ratio	0.54	0.54
Cost of debt	6.80%	37.40%

After-tax WACC	8.0%	19.0%


Selected WACC	13.5%

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 (10.55%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.14) + 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.