AOA.AX
Ausmon Resources Ltd
Price:  
AUD
Volume:  
186,447
Australia | Metals & Mining

AOA.AX WACC - Weighted Average Cost of Capital

The WACC of Ausmon Resources Ltd (AOA.AX) is 8.0%.

The Cost of Equity of Ausmon Resources Ltd (AOA.AX) is 8.65%.
The Cost of Debt of Ausmon Resources Ltd (AOA.AX) is 5%.

RangeSelected
Cost of equity7.0% - 10.3%8.65%
Tax rate30.0% - 30.0%30%
Cost of debt5.0% - 5.0%5%
WACC6.6% - 9.4%8.0%
WACC

AOA.AX WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium5.1%6.1%
Adjusted beta0.590.87
Additional risk adjustments0.0%0.5%
Cost of equity7.0%10.3%
Tax rate30.0%30.0%
Debt/Equity ratio
0.160.16
Cost of debt5.0%5.0%
After-tax WACC6.6%9.4%
Selected WACC8.0%

AOA.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 AOA.AX:

cost_of_equity (8.65%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.59) + 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.