UNV.V WACC - Weighted Average Cost of Capital
The WACC of Universal Copper Ltd (UNV.V) is 8.4%.
| Range | Selected | |
| Cost of equity | 10.4% - 15.9% | 13.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.0% - 9.8% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.28 | 1.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.4% | 15.9% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.0% | 9.8% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| UNV.V | Universal Copper Ltd | 1.06 | -2.21 | -1.25 |
| ERO.TO | Ero Copper Corp | 0.46 | 2.05 | 1.54 |
| FCX | Freeport-McMoRan Inc | 0.16 | 1.91 | 1.71 |
| III.TO | Imperial Metals Corp | 0.63 | 1.34 | 0.92 |
| JOSE.TO | Josemaria Resources Inc | 0.06 | 1.47 | 1.41 |
| MARI.TO | Marimaca Copper Corp | 0 | 0.36 | 0.36 |
| SRHI.TO | SRHI Inc | 6.48 | 1.85 | 0.32 |
| SURG.V | Surge Copper Corp | 0 | 1.76 | 1.76 |
| TKO.TO | Taseko Mines Ltd | 0.95 | 2.03 | 1.2 |
| TM.V | Trigon Metals Inc | 0.38 | 0.85 | 0.67 |
| Low | High | |
| Unlevered beta | 0.82 | 1.28 |
| Relevered beta | 1.42 | 2.21 |
| Adjusted relevered beta | 1.28 | 1.81 |
UNV.V'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 UNV.V:
cost_of_equity (13.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.28) + 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.