BSM.AX WACC - Weighted Average Cost of Capital
The WACC of Bass Metals Ltd (BSM.AX) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.4% | 9% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.8% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.83 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.4% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.29 | 0.29 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.8% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BSM.AX | Bass Metals Ltd | 0.29 | 1.6 | 1.33 |
| ADV.AX | Ardiden Ltd | 1.03 | 0.39 | 0.23 |
| COY.AX | Coppermoly Ltd | 0.93 | 0.73 | 0.44 |
| CST.AX | Castile Resources Ltd | 0 | 0.76 | 0.76 |
| DME.AX | Dome Gold Mines Ltd | 0.01 | -0.39 | -0.39 |
| ENR.AX | Encounter Resources Ltd | 0 | 0.72 | 0.72 |
| EQR.AX | EQ Resources Ltd | 0.4 | 0.14 | 0.11 |
| S2R.AX | S2 Resources Ltd | 0 | -0.36 | -0.36 |
| SGQ.AX | St George Mining Ltd | 0 | 2.96 | 2.95 |
| TAS.AX | Tasman Resources Ltd | 6.25 | -1.87 | -0.35 |
| Low | High | |
| Unlevered beta | 0.18 | 0.55 |
| Relevered beta | 0.75 | 0.99 |
| Adjusted relevered beta | 0.83 | 0.99 |
BSM.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 BSM.AX:
cost_of_equity (9.00%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.83) + 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.