TML.TO WACC - Weighted Average Cost of Capital
The WACC of Treasury Metals Inc (TML.TO) is 7.5%.
| Range | Selected | |
| Cost of equity | 6.9% - 10.4% | 8.65% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 8.8% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.74 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 10.4% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.3 | 0.3 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 8.8% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TML.TO | Treasury Metals Inc | 0.3 | 1.78 | 1.46 |
| BTR.V | BonTerra Resources Inc | 0 | 0.72 | 0.72 |
| FISH.V | Sailfish Royalty Corp | 0.04 | 0.6 | 0.58 |
| KORE.V | Kore Mining Ltd | 0.01 | 1.23 | 1.22 |
| LN.TO | Loncor Resources Inc | 0 | 0.01 | 0.01 |
| MAU.V | Montage Gold Corp | 0 | 1.34 | 1.34 |
| ORG.V | Orca Gold Inc | 0 | 0.53 | 0.53 |
| OSI.V | Osino Resources Corp | 0.06 | 0.76 | 0.73 |
| RIO.V | Rio2 Ltd | 0 | 1.86 | 1.86 |
| SPA.V | Spanish Mountain Gold Ltd | 0 | 0.8 | 0.8 |
| Low | High | |
| Unlevered beta | 0.72 | 0.97 |
| Relevered beta | 0.61 | 1.03 |
| Adjusted relevered beta | 0.74 | 1.02 |
TML.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 TML.TO:
cost_of_equity (8.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.74) + 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.