USAU WACC - Weighted Average Cost of Capital
The WACC of US Gold Corp (USAU) is 7.9%.
| Range | Selected | |
| Cost of equity | 10.0% - 14.0% | 12% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 8.8% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.34 | 1.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.0% | 14.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 8.8% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| USAU | US Gold Corp | 0.98 | 1.95 | 1.14 |
| AVL.TO | Avalon Advanced Materials Inc | 0.46 | 1.64 | 1.23 |
| CDPR.CN | Cerro De Pasco Resources Inc | 0.01 | 2.02 | 2 |
| GZZ.V | Golden Valley Mines Ltd | 0 | 1.01 | 1.01 |
| LR.V | Luminex Resources Corp | 0 | 0.31 | 0.31 |
| MGR.V | Magna Gold Corp | 11.57 | 0.46 | 0.05 |
| NOT.V | Noront Resources Ltd | 0.1 | 1.2 | 1.13 |
| OM.V | Osisko Metals Inc | 0.19 | 1.28 | 1.13 |
| PLL | Piedmont Lithium Inc | 0.19 | 1.6 | 1.41 |
| SANP | Santo Mining Corp | 82.59 | 0 | 0 |
| SX.CN | St-Georges Eco-Mining Corp | 0.08 | 0.7 | 0.66 |
| Low | High | |
| Unlevered beta | 1.01 | 1.13 |
| Relevered beta | 1.51 | 1.96 |
| Adjusted relevered beta | 1.34 | 1.64 |
USAU'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 USAU:
cost_of_equity (12.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.34) + 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.