VALU.CN WACC - Weighted Average Cost of Capital
The WACC of Valorem Resources Inc (VALU.CN) is 4.3%.
| Range | Selected | |
| Cost of equity | 3.8% - 6.2% | 5% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.7% - 4.9% | 4.3% |
| Category | Low | High |
| Long-term bond rate | 3.6% | 4.1% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.04 | 0.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.8% | 6.2% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.7% | 4.9% |
| Selected WACC | 4.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VALU.CN | Valorem Resources Inc | 1.1 | 1.84 | 1.02 |
| ARIC.V | Awale Resources Ltd | 1.12 | 0.86 | 0.47 |
| GLNS | Golden Star Resource Corp | 0.03 | -0.64 | -0.62 |
| GRAY.CN | Graycliff Exploration Ltd | 0.2 | 2.02 | 1.76 |
| HWY.V | Highway 50 Gold Corp | 0.07 | 0.27 | 0.25 |
| ITKO.CN | Idaho Champion Gold Mines Canada Inc | 0 | 0.04 | 0.04 |
| NSG.CN | Northstar Gold Corp | 1.18 | 0.8 | 0.43 |
| NXS.V | Nexus Gold Corp | 1.47 | 3.5 | 1.68 |
| OTS.H.V | Optimus Gold Corp | 0.08 | -0.59 | -0.56 |
| TECT.V | Tectonic Metals Inc | 1.09 | 0.84 | 0.47 |
| USGD.CN | American Pacific Mining Corp | 0.03 | 1.15 | 1.13 |
| Low | High | |
| Unlevered beta | 0.43 | 0.47 |
| Relevered beta | -0.43 | -0.12 |
| Adjusted relevered beta | 0.04 | 0.25 |
VALU.CN'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 VALU.CN:
cost_of_equity (5.00%) = risk_free_rate (3.85%) + equity_risk_premium (6.00%) * adjusted_beta (0.04) + 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.