APG.AX WACC - Weighted Average Cost of Capital
The WACC of Austpac Resources NL (APG.AX) is 7.4%.
| Range | Selected | |
| Cost of equity | 5.8% - 9.4% | 7.6% |
| Tax rate | 25.5% - 31.9% | 28.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.7% - 9.2% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.35 | 0.72 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 9.4% |
| Tax rate | 25.5% | 31.9% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.7% | 9.2% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| APG.AX | Austpac Resources NL | 0.05 | 3.55 | 3.43 |
| Low | High | |
| Unlevered beta | 3.43 | 3.43 |
| Relevered beta | 0.03 | 0.58 |
| Adjusted relevered beta | 0.35 | 0.72 |
APG.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 APG.AX:
cost_of_equity (7.60%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.