SZM.V WACC - Weighted Average Cost of Capital
The WACC of ScoZinc Mining Ltd (SZM.V) is 7.8%.
| Range | Selected | |
| Cost of equity | 5.6% - 10.0% | 7.8% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.6% - 10.0% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.51 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 10.0% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.6% | 10.0% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SZM.V | ScoZinc Mining Ltd | 0 | 1.87 | 1.86 |
| AAN.V | Aton Resources Inc | 0.46 | -0.18 | -0.14 |
| AWE.V | Thunderstruck Resources Ltd | 0.87 | 0.15 | 0.09 |
| BAY.V | Aston Bay Holdings Ltd | 0.05 | 1.17 | 1.12 |
| CMD.V | Commander Resources Ltd | 0.01 | 0.2 | 0.2 |
| FEX.V | Fjordland Exploration Inc | 0.03 | 0.8 | 0.78 |
| MOON.V | Blue Moon Zinc Corp | 1.01 | 4.11 | 2.36 |
| RTH.V | Rathdowney Resources Ltd | 0.5 | 2.22 | 1.63 |
| Low | High | |
| Unlevered beta | 0.67 | 1.22 |
| Relevered beta | 0.27 | 1.03 |
| Adjusted relevered beta | 0.51 | 1.02 |
SZM.V'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 SZM.V:
cost_of_equity (7.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.20%) * adjusted_beta (0.51) + 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.