VGCX.TO WACC - Weighted Average Cost of Capital
The WACC of Victoria Gold Corp (VGCX.TO) is 7.5%.
| Range | Selected | |
| Cost of equity | 27.7% - 41.1% | 34.4% |
| Tax rate | 30.1% - 35.7% | 32.9% |
| Cost of debt | 5.2% - 6.3% | 5.75% |
| WACC | 6.5% - 8.5% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 4.82 | 6.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 27.7% | 41.1% |
| Tax rate | 30.1% | 35.7% |
| Debt/Equity ratio | 7.37 | 7.37 |
| Cost of debt | 5.2% | 6.3% |
| After-tax WACC | 6.5% | 8.5% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VGCX.TO | Victoria Gold Corp | 7.37 | 0.17 | 0.03 |
| FVL.TO | Freegold Ventures Ltd | 0 | 1.49 | 1.49 |
| GAU.TO | Galiano Gold Inc | 0.09 | 1.35 | 1.27 |
| KOR.TO | Corvus Gold Inc | 0.01 | 1.45 | 1.44 |
| LGD.TO | Liberty Gold Corp | 0 | 1.59 | 1.58 |
| LUM.V | Lumina Gold Corp | 0 | 1.56 | 1.56 |
| MOZ.TO | Marathon Gold Corp | 0.09 | 1.57 | 1.48 |
| NSR.TO | Nomad Royalty Company Ltd | 0.18 | 1.06 | 0.95 |
| RUP.V | Rupert Resources Ltd | 0 | 0.8 | 0.8 |
| SBB.TO | Sabina Gold & Silver Corp | 0.08 | 0.87 | 0.83 |
| Low | High | |
| Unlevered beta | 1.14 | 1.45 |
| Relevered beta | 6.7 | 8.55 |
| Adjusted relevered beta | 4.82 | 6.06 |
VGCX.TO'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 VGCX.TO:
cost_of_equity (34.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (4.82) + 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.