CHZ.AX WACC - Weighted Average Cost of Capital
The WACC of Chesser Resources Ltd (CHZ.AX) is 6.6%.
| Range | Selected | |
| Cost of equity | 7.8% - 12.3% | 10.05% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 5.5% - 7.8% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.74 | 1.19 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 12.3% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 5.5% | 7.8% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CHZ.AX | Chesser Resources Ltd | 1 | 0.63 | 0.37 |
| AML.AX | Aeon Metals Ltd | 6.37 | -0.1 | -0.02 |
| AVL.AX | Australian Vanadium Ltd | 0.03 | 1.08 | 1.06 |
| AZY.AX | Antipa Minerals Ltd | 0 | 1.24 | 1.24 |
| BDM.AX | Burgundy Diamond Mines Ltd | 0.43 | 0.12 | 0.09 |
| DRX.AX | Diatreme Resources Ltd | 0.01 | 0.93 | 0.92 |
| JRL.AX | Jindalee Resources Ltd | 0 | 0.68 | 0.68 |
| NML.AX | Navarre Minerals Ltd | 0.31 | 0.67 | 0.55 |
| QPM.AX | Queensland Pacific Metals Ltd | 0.67 | 1.29 | 0.88 |
| RXL.AX | Rox Resources Ltd | 0 | -0.53 | -0.53 |
| VMS.AX | Venture Minerals Ltd | 0 | -0.47 | -0.47 |
| Low | High | |
| Unlevered beta | 0.37 | 0.68 |
| Relevered beta | 0.61 | 1.28 |
| Adjusted relevered beta | 0.74 | 1.19 |
CHZ.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 CHZ.AX:
cost_of_equity (10.05%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.74) + 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.