CUL.AX WACC - Weighted Average Cost of Capital
The WACC of Cullen Resources Ltd (CUL.AX) is 7.3%.
| Range | Selected | |
| Cost of equity | 9.0% - 13.1% | 11.05% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.3% - 8.3% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.98 | 1.32 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.0% | 13.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.3% | 8.3% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CUL.AX | Cullen Resources Ltd | 0.99 | 2.24 | 1.32 |
| AOA.AX | Ausmon Resources Ltd | 0.17 | 1.27 | 1.13 |
| KFM.AX | Kingfisher Mining Ltd | 0.02 | 0.31 | 0.31 |
| KOR.AX | Korab Resources Ltd | 1.46 | 1.41 | 0.7 |
| MQR.AX | Marquee Resources Ltd | 0.01 | 0.21 | 0.21 |
| MTB.AX | Mount Burgess Mining NL | 1.53 | 1.08 | 0.52 |
| NWM.AX | Norwest Minerals Ltd | 0.03 | 1.14 | 1.12 |
| RMI.AX | Resource Mining Corporation Ltd | 0.03 | 1.63 | 1.59 |
| SUH.AX | Southern Hemisphere Mining Ltd | 0.01 | 1.29 | 1.28 |
| WML.AX | Woomera Mining Ltd | 0.02 | 0.62 | 0.61 |
| XTC.AX | Xantippe Resources Ltd | 0.02 | -0.15 | -0.14 |
| Low | High | |
| Unlevered beta | 0.61 | 1.12 |
| Relevered beta | 0.97 | 1.48 |
| Adjusted relevered beta | 0.98 | 1.32 |
CUL.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 CUL.AX:
cost_of_equity (11.05%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.98) + 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.