TNX.TO
Tanzanian Gold Corp
Price:  
0.50 
CAD
Volume:  
2,989.00
Canada | Metals & Mining
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TNX.TO WACC - Weighted Average Cost of Capital

The WACC of Tanzanian Gold Corp (TNX.TO) is 8.8%.

The Cost of Equity of Tanzanian Gold Corp (TNX.TO) is 13.80%.
The Cost of Debt of Tanzanian Gold Corp (TNX.TO) is 5.00%.

Range Selected
Cost of equity 11.70% - 15.90% 13.80%
Tax rate 26.50% - 26.50% 26.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.7% - 9.8% 8.8%
WACC

TNX.TO WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 1.77 2.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.70% 15.90%
Tax rate 26.50% 26.50%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 7.7% 9.8%
Selected WACC 8.8%

TNX.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 TNX.TO:

cost_of_equity (13.80%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (1.77) + 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.