VG.V WACC - Weighted Average Cost of Capital
The WACC of Volcanic Gold Mines Inc (VG.V) is 7.7%.
| Range | Selected | |
| Cost of equity | 6.6% - 8.8% | 7.7% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.6% - 8.8% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.54 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 8.8% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.6% | 8.8% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VG.V | Volcanic Gold Mines Inc | 0.01 | 0.2 | 0.2 |
| ASE.CN | Asante Gold Corp | 0.02 | 0.5 | 0.49 |
| BAT.V | Batero Gold Corp | 0.13 | 0.35 | 0.32 |
| CVB.V | Compass Gold Corp | 0.08 | -0.01 | -0.01 |
| GFG.V | GFG Resources Inc | 0 | 0.47 | 0.47 |
| GGM.V | Granada Gold Mine Inc | 0.34 | 1.31 | 1.05 |
| GTR.V | Gatling Exploration Inc | 0.02 | 0.31 | 0.3 |
| MAS.V | MAS Gold Corp | 0.03 | 1.72 | 1.68 |
| MM.CN | Metallica Metals Corp | 0 | 1.49 | 1.49 |
| OTSO.V | Otso Gold Corp | 0.78 | -0.18 | -0.12 |
| Low | High | |
| Unlevered beta | 0.32 | 0.48 |
| Relevered beta | 0.31 | 0.48 |
| Adjusted relevered beta | 0.54 | 0.65 |
VG.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 VG.V:
cost_of_equity (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.54) + 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.