SVM.TO WACC - Weighted Average Cost of Capital

The WACC of Silvercorp Metals Inc (SVM.TO) is 9.8%.

The Cost of Equity of Silvercorp Metals Inc (SVM.TO) is 10.60%.

The Cost of Debt of Silvercorp Metals Inc (SVM.TO) is 4.40%.

	Range	Selected
Cost of equity	8.70% - 12.50%	10.60%
Tax rate	24.60% - 26.60%	25.60%
Cost of debt	4.00% - 4.80%	4.40%
WACC	8.0% - 11.5%	9.8%

WACC

SVM.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.08	1.36

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	12.50%

Tax rate	24.60%	26.60%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.00%	4.80%

After-tax WACC	8.0%	11.5%


Selected WACC	9.8%

SVM.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 SVM.TO:

cost_of_equity (10.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.08) + 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.