A1M.AX WACC - Weighted Average Cost of Capital
The WACC of AIC Mines Ltd (A1M.AX) is 8.0%.
| Range | Selected | |
| Cost of equity | 6.3% - 10.0% | 8.15% |
| Tax rate | 2.5% - 10.0% | 6.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 9.8% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.44 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 10.0% |
| Tax rate | 2.5% | 10.0% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 9.8% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| A1M.AX | AIC Mines Ltd | 0.03 | 1.83 | 1.77 |
| ACP.AX | Audalia Resources Ltd | 0.35 | -0.88 | -0.66 |
| ANX.AX | Anax Metals Ltd | 0.45 | 0.34 | 0.24 |
| CLZ.AX | Classic Minerals Ltd | 0.35 | 0.57 | 0.42 |
| GIB.AX | GIBB River Diamonds Ltd | 0 | -1.45 | -1.45 |
| IDA.AX | Indiana Resources Ltd | 0 | 0.05 | 0.05 |
| MAG.AX | Magmatic Resources Ltd | 0.04 | 1.58 | 1.53 |
| QEM.AX | QEM Ltd | 0 | 1.13 | 1.12 |
| RIE.AX | Riedel Resources Ltd | 0.02 | -0.69 | -0.68 |
| SHN.AX | Sunshine Gold Ltd | 0.01 | 2.03 | 2.02 |
| Low | High | |
| Unlevered beta | 0.16 | 0.7 |
| Relevered beta | 0.16 | 0.73 |
| Adjusted relevered beta | 0.44 | 0.82 |
A1M.AX'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 A1M.AX:
cost_of_equity (8.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.