WPM.TO WACC - Weighted Average Cost of Capital

The WACC of Wheaton Precious Metals Corp (WPM.TO) is 9.4%.

The Cost of Equity of Wheaton Precious Metals Corp (WPM.TO) is 9.40%.

The Cost of Debt of Wheaton Precious Metals Corp (WPM.TO) is 4.25%.

	Range	Selected
Cost of equity	8.00% - 10.80%	9.40%
Tax rate	0.20% - 0.40%	0.30%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.0% - 10.8%	9.4%

WACC

WPM.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.95	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	10.80%

Tax rate	0.20%	0.40%
Debt/Equity ratio	0	0
Cost of debt	4.00%	4.50%

After-tax WACC	8.0%	10.8%


Selected WACC	9.4%

WPM.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 WPM.TO:

cost_of_equity (9.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.95) + 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.