CY5.AX WACC - Weighted Average Cost of Capital
The WACC of Cygnus Gold Ltd (CY5.AX) is 6.8%.
| Range | Selected | |
| Cost of equity | 8.7% - 11.4% | 10.05% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.4% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.91 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 11.4% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.4% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CY5.AX | Cygnus Gold Ltd | 1.07 | 1.64 | 0.94 |
| KTA.AX | Krakatoa Resources Ltd | 0.01 | 0.57 | 0.57 |
| NPM.AX | Newpeak Metals Ltd | 0.11 | -0.78 | -0.72 |
| NXM.AX | Nexus Minerals Ltd | 0 | 0.6 | 0.6 |
| OAU.AX | Ora Gold Ltd | 0.09 | -0.78 | -0.74 |
| PUA.AX | Peak Minerals Ltd | 0 | 0.74 | 0.74 |
| SAU.AX | Southern Gold Ltd | 0.01 | 1.29 | 1.28 |
| SMI.AX | Santana Minerals Ltd | 0 | 1.88 | 1.88 |
| STK.AX | Strickland Metals Ltd | 0 | 0.29 | 0.29 |
| Low | High | |
| Unlevered beta | 0.58 | 0.71 |
| Relevered beta | 0.87 | 1.06 |
| Adjusted relevered beta | 0.91 | 1.04 |
CY5.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 CY5.AX:
cost_of_equity (10.05%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.91) + 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.