AAZ.L WACC - Weighted Average Cost of Capital

The WACC of Anglo Asian Mining PLC (AAZ.L) is 7.3%.

The Cost of Equity of Anglo Asian Mining PLC (AAZ.L) is 7.40%.

The Cost of Debt of Anglo Asian Mining PLC (AAZ.L) is 9.70%.

	Range	Selected
Cost of equity	6.50% - 8.30%	7.40%
Tax rate	30.70% - 37.60%	34.15%
Cost of debt	7.00% - 12.40%	9.70%
WACC	6.4% - 8.3%	7.3%

WACC

AAZ.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.42	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	8.30%

Tax rate	30.70%	37.60%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.00%	12.40%

After-tax WACC	6.4%	8.3%


Selected WACC	7.3%

AAZ.L'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 AAZ.L:

cost_of_equity (7.40%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.42) + 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.