APC.AX WACC - Weighted Average Cost of Capital
The WACC of Australian Potash Ltd (APC.AX) is 6.5%.
| Range | Selected | |
| Cost of equity | 8.3% - 11.1% | 9.7% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 5.8% - 7.1% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.84 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 11.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 5.8% | 7.1% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| APC.AX | Australian Potash Ltd | 0.19 | 0.25 | 0.22 |
| AZS.AX | Azure Minerals Ltd | 0 | 0.65 | 0.65 |
| BDM.AX | Burgundy Diamond Mines Ltd | 0.44 | 0.5 | 0.38 |
| BKT.AX | Black Rock Mining Ltd | 0.01 | 1.62 | 1.61 |
| EM2.AX | Eagle Mountain Mining Ltd | 2.12 | 1.21 | 0.49 |
| JRL.AX | Jindalee Resources Ltd | 0 | 0.68 | 0.68 |
| MEP.AX | Minotaur Exploration Ltd | 0.02 | 1.98 | 1.96 |
| NML.AX | Navarre Minerals Ltd | 0.31 | 0.67 | 0.55 |
| RXL.AX | Rox Resources Ltd | 0 | -0.34 | -0.34 |
| TZN.AX | Terramin Australia Ltd | 0.35 | 0.24 | 0.19 |
| VMS.AX | Venture Minerals Ltd | 0 | -0.47 | -0.47 |
| Low | High | |
| Unlevered beta | 0.38 | 0.55 |
| Relevered beta | 0.76 | 0.99 |
| Adjusted relevered beta | 0.84 | 0.99 |
APC.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 APC.AX:
cost_of_equity (9.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.84) + 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.