STGO.TO WACC - Weighted Average Cost of Capital

The WACC of Steppe Gold Ltd (STGO.TO) is 11.8%.

The Cost of Equity of Steppe Gold Ltd (STGO.TO) is 10.15%.

The Cost of Debt of Steppe Gold Ltd (STGO.TO) is 19.60%.

	Range	Selected
Cost of equity	8.50% - 11.80%	10.15%
Tax rate	17.40% - 22.60%	20.00%
Cost of debt	4.10% - 35.10%	19.60%
WACC	6.9% - 16.8%	11.8%

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	1.05	1.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.50%	11.80%

Tax rate	17.40%	22.60%
Debt/Equity ratio	0.47	0.47
Cost of debt	4.10%	35.10%

After-tax WACC	6.9%	16.8%


Selected WACC	11.8%

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 (10.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.05) + 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.