AOU.AX WACC - Weighted Average Cost of Capital
The WACC of Auroch Minerals Ltd (AOU.AX) is 5.6%.
| Range | Selected | |
| Cost of equity | 6.4% - 9.1% | 7.75% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 6.3% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 4.1% | 4.6% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.41 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 9.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 6.3% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AOU.AX | Auroch Minerals Ltd | 0 | 2.65 | 2.64 |
| AML.AX | Aeon Metals Ltd | 6.37 | -0.1 | -0.02 |
| BAT.AX | Battery Minerals Ltd | 0 | 5.39 | 5.39 |
| DME.AX | Dome Gold Mines Ltd | 0.01 | -0.52 | -0.52 |
| DRX.AX | Diatreme Resources Ltd | 0.01 | 0.93 | 0.92 |
| EQR.AX | EQ Resources Ltd | 0.47 | 0.28 | 0.21 |
| HAV.AX | Havilah Resources Ltd | 0 | 1.25 | 1.25 |
| KRR.AX | King River Resources Ltd | 0.01 | 0.28 | 0.28 |
| KSN.AX | Kingston Resources Ltd | 0.08 | 0.71 | 0.67 |
| PSC.AX | Prospect Resources Ltd | 0 | 0.75 | 0.75 |
| RTR.AX | Rumble Resources Ltd | 0 | 0.85 | 0.85 |
| Low | High | |
| Unlevered beta | 0.67 | 0.85 |
| Relevered beta | 0.12 | 0.42 |
| Adjusted relevered beta | 0.41 | 0.61 |
AOU.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 AOU.AX:
cost_of_equity (7.75%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (0.41) + 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.