The WACC of Trevali Mining Corp (TV.TO) is 10.3%.
Range | Selected | |
Cost of equity | 17.3% - 23.5% | 20.4% |
Tax rate | 25.9% - 26.5% | 26.2% |
Cost of debt | 5.3% - 14.9% | 10.1% |
WACC | 6.9% - 13.8% | 10.3% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 2.78 | 3.17 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 17.3% | 23.5% |
Tax rate | 25.9% | 26.5% |
Debt/Equity ratio | 3.49 | 3.49 |
Cost of debt | 5.3% | 14.9% |
After-tax WACC | 6.9% | 13.8% |
Selected WACC | 10.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TV.TO | Trevali Mining Corp | 3.49 | 2.88 | 0.81 |
AFM.V | Alphamin Resources Corp | 0.09 | 0.75 | 0.71 |
AII.TO | Almonty Industries Inc | 0.12 | 1.87 | 1.72 |
ARG.TO | Amerigo Resources Ltd | 0.04 | 1.1 | 1.07 |
FAR.TO | Foraco International SA | 0.64 | 1.42 | 0.96 |
MDI.TO | Major Drilling Group International Inc | 0.01 | 1.8 | 1.79 |
OGD.TO | Forage Orbit Garant Inc | 0.52 | 0.06 | 0.04 |
SFR.V | Sandfire Resources America Inc | 0.15 | 1.27 | 1.14 |
SMT.TO | Sierra Metals Inc | 0.59 | 0.26 | 0.18 |
WRN.TO | Western Copper and Gold Corp | 0 | 1.26 | 1.26 |
ZEN.V | ZEN Graphene Solutions Ltd | 0.01 | 1.79 | 1.78 |
Low | High | |
Unlevered beta | 0.96 | 1.14 |
Relevered beta | 3.66 | 4.24 |
Adjusted relevered beta | 2.78 | 3.17 |
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 TV.TO:
cost_of_equity (20.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (2.78) + 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.