BAR.AX
Barra Resources Ltd
Price:  
0.04 
AUD
Volume:  
2,065,960.00
Australia | Metals & Mining
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BAR.AX WACC - Weighted Average Cost of Capital

The WACC of Barra Resources Ltd (BAR.AX) is 9.9%.

The Cost of Equity of Barra Resources Ltd (BAR.AX) is 9.90%.
The Cost of Debt of Barra Resources Ltd (BAR.AX) is 5.00%.

Range Selected
Cost of equity 8.20% - 11.60% 9.90%
Tax rate 3.20% - 5.60% 4.40%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.2% - 11.6% 9.9%
WACC

BAR.AX WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.96 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.20% 11.60%
Tax rate 3.20% 5.60%
Debt/Equity ratio 0 0
Cost of debt 5.00% 5.00%
After-tax WACC 8.2% 11.6%
Selected WACC 9.9%

BAR.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 BAR.AX:

cost_of_equity (9.90%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.96) + 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.