The WACC of TVI Pacific Inc (TVI.V) is 8.5%.
Range | Selected | |
Cost of equity | 7.4% - 10.4% | 8.9% |
Tax rate | 1.4% - 2.4% | 1.9% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.1% - 9.9% | 8.5% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.69 | 0.91 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.4% | 10.4% |
Tax rate | 1.4% | 2.4% |
Debt/Equity ratio | 0.11 | 0.11 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.1% | 9.9% |
Selected WACC | 8.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TVI.V | TVI Pacific Inc | 0.11 | -2.72 | -2.45 |
AQA.TO | Aquila Resources Inc | 0.02 | 0.88 | 0.86 |
BHS.V | Bayhorse Silver Inc | 0.03 | 0.91 | 0.88 |
CGLD | Buscar Co | 0.04 | 1.77 | 1.71 |
DAN.V | Arianne Phosphate Inc | 0.78 | 0.66 | 0.37 |
ENDR.V | Enduro Metals Corp | 0.05 | 0.76 | 0.73 |
GGO.V | Galleon Gold Corp | 0.17 | 0.47 | 0.41 |
GIGA.V | Giga Metals Corp | 0 | 0.95 | 0.95 |
NGC.V | Northern Graphite Corp | 2.18 | 0.67 | 0.21 |
PUBC | PureBase Corp | 0.09 | 0.58 | 0.53 |
SMY.V | Search Minerals Inc | 0.15 | -1.27 | -1.1 |
Low | High | |
Unlevered beta | 0.41 | 0.73 |
Relevered beta | 0.54 | 0.87 |
Adjusted relevered beta | 0.69 | 0.91 |
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 TVI.V:
cost_of_equity (8.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.