The WACC of Titan Mining Corp (TI.TO) is 9.2%.
| Range | Selected | |
| Cost of equity | 8.70% - 10.80% | 9.75% |
| Tax rate | 1.60% - 4.70% | 3.15% |
| Cost of debt | 4.40% - 9.70% | 7.05% |
| WACC | 7.8% - 10.5% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.08 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.70% | 10.80% |
| Tax rate | 1.60% | 4.70% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.40% | 9.70% |
| After-tax WACC | 7.8% | 10.5% |
| Selected WACC | 9.2% | |
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 TI.TO:
cost_of_equity (9.75%) = 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.