BCN.L WACC - Weighted Average Cost of Capital
The WACC of Bacanora Lithium PLC (BCN.L) is 9.3%.
| Range | Selected | |
| Cost of equity | 8.3% - 11.1% | 9.7% |
| Tax rate | 0.0% - 0.0% | 0% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.0% - 10.6% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 1.01 | 1.13 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 11.1% |
| Tax rate | 0.0% | 0.0% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.0% | 10.6% |
| Selected WACC | 9.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BCN.L | Bacanora Lithium PLC | 0.09 | 1.99 | 1.82 |
| ACP.L | Armadale Capital PLC | 1 | -2.95 | -1.47 |
| ALS.L | Altus Strategies PLC | 0.37 | 1.14 | 0.84 |
| ARCM.L | ARC Minerals Ltd | 0.01 | 0.68 | 0.67 |
| ATM.L | AfriTin Mining Ltd | 0.28 | 0.79 | 0.61 |
| BLS.SW | Blackstone Resources AG | 2.32 | 1.06 | 0.32 |
| JAY.L | Bluejay Mining PLC | 0.98 | 1.28 | 0.64 |
| KEFI.L | KEFI Gold and Copper Plc | 0.04 | 0.6 | 0.57 |
| RIO.L | Rio Tinto PLC | 0.13 | 1.12 | 0.99 |
| SAV.L | Savannah Resources Plc | 0 | -0.41 | -0.41 |
| Low | High | |
| Unlevered beta | 0.6 | 0.66 |
| Relevered beta | 1.01 | 1.19 |
| Adjusted relevered beta | 1.01 | 1.13 |
BCN.L'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 BCN.L:
cost_of_equity (9.70%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.01) + 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.