STGO.TO WACC - Weighted Average Cost of Capital

The WACC of Steppe Gold Ltd (STGO.TO) is 14.5%.

The Cost of Equity of Steppe Gold Ltd (STGO.TO) is 11.70%.

The Cost of Debt of Steppe Gold Ltd (STGO.TO) is 21.85%.

	Range	Selected
Cost of equity	10.00% - 13.40%	11.70%
Tax rate	9.80% - 15.00%	12.40%
Cost of debt	6.30% - 37.40%	21.85%
WACC	8.3% - 20.6%	14.5%

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	1.34	1.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	13.40%

Tax rate	9.80%	15.00%
Debt/Equity ratio	0.65	0.65
Cost of debt	6.30%	37.40%

After-tax WACC	8.3%	20.6%


Selected WACC	14.5%

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 (11.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.34) + 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.