The WACC of Cyprium Metals Ltd (CYM.AX) is 7.2%.
Range | Selected | |
Cost of equity | 7.3% - 12.0% | 9.65% |
Tax rate | 1.3% - 3.3% | 2.3% |
Cost of debt | 4.0% - 4.7% | 4.35% |
WACC | 5.8% - 8.6% | 7.2% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.64 | 1.14 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.3% | 12.0% |
Tax rate | 1.3% | 3.3% |
Debt/Equity ratio | 0.81 | 0.81 |
Cost of debt | 4.0% | 4.7% |
After-tax WACC | 5.8% | 8.6% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CYM.AX | Cyprium Metals Ltd | 0.81 | 2.29 | 1.28 |
AIS.AX | Aeris Resources Ltd | 0.34 | 0.71 | 0.53 |
AMG.AX | Ausmex Mining Group Ltd | 0.02 | 0.56 | 0.55 |
AQX.AX | Alice Queen Ltd | 0.04 | 0.88 | 0.85 |
CWX.AX | Carawine Resources Ltd | 0 | -0.37 | -0.37 |
HCH.AX | Hot Chili Ltd | 0.01 | 1.67 | 1.66 |
OZL.AX | OZ Minerals Ltd | 0.12 | 1.12 | 1 |
PNX.AX | PNX Metals Ltd | 0.01 | -0.84 | -0.83 |
RCP.AX | Redbank Copper Ltd | 0.05 | -0.15 | -0.15 |
SFR.AX | Sandfire Resources Ltd | 0.11 | 1.88 | 1.7 |
VMC.AX | Venus Metals Corporation Ltd | 0 | -1.08 | -1.07 |
Low | High | |
Unlevered beta | 0.53 | 0.85 |
Relevered beta | 0.46 | 1.21 |
Adjusted relevered beta | 0.64 | 1.14 |
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 CYM.AX:
cost_of_equity (9.65%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.64) + 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.