AON.AX WACC - Weighted Average Cost of Capital
The WACC of Apollo Minerals Ltd (AON.AX) is 5.4%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.3% | 7.25% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 5.9% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.43 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.3% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 5.9% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AON.AX | Apollo Minerals Ltd | 0.84 | 0.64 | 0.4 |
| A1M.AX | AIC Mines Ltd | 0.03 | 1.83 | 1.79 |
| ANX.AX | Anax Metals Ltd | 0.45 | 0.34 | 0.26 |
| 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 | 1.54 |
| MCT.AX | Metalicity Ltd | 0 | -1.83 | -1.83 |
| MTC.AX | Metalstech Ltd | 0.05 | -1.98 | -1.91 |
| OAR.AX | OAR Resources Ltd | 0.18 | 0.15 | 0.13 |
| QEM.AX | QEM Ltd | 0 | 1.13 | 1.12 |
| SRN.AX | Surefire Resources NL | 0.02 | 0.12 | 0.12 |
| Low | High | |
| Unlevered beta | 0.12 | 0.26 |
| Relevered beta | 0.15 | 0.31 |
| Adjusted relevered beta | 0.43 | 0.54 |
AON.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 AON.AX:
cost_of_equity (7.25%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.43) + 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.