BLY.AX WACC - Weighted Average Cost of Capital

The WACC of Boart Longyear Ltd (BLY.AX) is 10.2%.

The Cost of Equity of Boart Longyear Ltd (BLY.AX) is 10.90%.

The Cost of Debt of Boart Longyear Ltd (BLY.AX) is 9.70%.

	Range	Selected
Cost of equity	9.80% - 12.00%	10.90%
Tax rate	9.70% - 11.30%	10.50%
Cost of debt	6.90% - 12.50%	9.70%
WACC	8.7% - 11.8%	10.2%

WACC

BLY.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.13	1.15

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.80%	12.00%

Tax rate	9.70%	11.30%
Debt/Equity ratio	0.45	0.45
Cost of debt	6.90%	12.50%

After-tax WACC	8.7%	11.8%


Selected WACC	10.2%

BLY.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 BLY.AX:

cost_of_equity (10.90%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.13) + 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.