BBX.AX WACC - Weighted Average Cost of Capital
The WACC of BBX Minerals Ltd (BBX.AX) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.3% - 9.1% | 7.7% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.9% - 4.9% | 4.9% |
| WACC | 6.0% - 8.5% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 4.1% | 4.6% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.4 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 9.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 4.9% | 4.9% |
| After-tax WACC | 6.0% | 8.5% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BBX.AX | BBX Minerals Ltd | 0.13 | 0.29 | 0.27 |
| AOP.AX | Apollo Consolidated Ltd | 0 | 0.59 | 0.59 |
| ARL.AX | Ardea Resources Ltd | 0.01 | 0.56 | 0.55 |
| BDC.AX | Bardoc Gold Ltd | 0.01 | 1.5 | 1.49 |
| BSX.AX | Blackstone Minerals Ltd | 0.02 | 1.22 | 1.2 |
| GMD.AX | Genesis Minerals Ltd | 0.01 | 0.91 | 0.9 |
| NWF.AX | Newfield Resources Ltd | 0.03 | -0.48 | -0.47 |
| TAM.AX | Tanami Gold NL | 0 | 0.99 | 0.99 |
| TSO.AX | Tesoro Resources Ltd | 0 | 1.93 | 1.93 |
| VAN.AX | Vango Mining Ltd | 0.03 | 0.06 | 0.06 |
| Low | High | |
| Unlevered beta | 0.58 | 0.94 |
| Relevered beta | 0.1 | 0.43 |
| Adjusted relevered beta | 0.4 | 0.62 |
BBX.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 BBX.AX:
cost_of_equity (7.70%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (0.4) + 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.