The WACC of Vizsla Silver Corp (VZLA.V) is 8.5%.
Range | Selected | |
Cost of equity | 11.5% - 15.1% | 13.3% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.6% - 9.4% | 8.5% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 1.49 | 1.68 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.5% | 15.1% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.6% | 9.4% |
Selected WACC | 8.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
VZLA.V | Vizsla Silver Corp | 1 | 1.82 | 1.05 |
ARU.V | Aurania Resources Ltd | 0.35 | 0.13 | 0.1 |
CTGO | Contango ORE Inc | 0.27 | 0.73 | 0.61 |
CYP.V | Cypress Development Corp | 0 | 1.26 | 1.25 |
ERD.TO | Erdene Resource Development Corp | 1.2 | 1.14 | 0.61 |
ETMC.V | E3 Metals Corp | 0 | 0.86 | 0.86 |
FCC.V | First Cobalt Corp | 0.04 | 1.82 | 1.76 |
FPX.V | FPX Nickel Corp | 0 | 0.84 | 0.84 |
GENM.TO | Generation Mining Ltd | 0.02 | 1.49 | 1.47 |
MGR.V | Magna Gold Corp | 11.57 | 0.46 | 0.05 |
MMS.V | Macarthur Minerals Ltd | 0.41 | -0.02 | -0.01 |
Low | High | |
Unlevered beta | 0.61 | 0.86 |
Relevered beta | 1.73 | 2.01 |
Adjusted relevered beta | 1.49 | 1.68 |
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 VZLA.V:
cost_of_equity (13.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (1.49) + 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.