DGO.AX WACC - Weighted Average Cost of Capital
The WACC of DGO Gold Ltd (DGO.AX) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.1% | 7.25% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 8.1% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.57 | 0.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 8.1% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DGO.AX | DGO Gold Ltd | 0 | -0.61 | -0.61 |
| BBX.AX | BBX Minerals Ltd | 0.13 | 0.29 | 0.27 |
| CYL.AX | Catalyst Metals Ltd | 0 | 0.44 | 0.44 |
| KCN.AX | Kingsgate Consolidated Ltd | 0.12 | 1.03 | 0.95 |
| NTM.AX | NTM GOLD ORD | 0.37 | 0.86 | 0.68 |
| NWF.AX | Newfield Resources Ltd | 0.03 | -0.48 | -0.47 |
| OBM.AX | Ora Banda Mining Ltd | 0.02 | 1.11 | 1.1 |
| TAM.AX | Tanami Gold NL | 0 | 0.76 | 0.76 |
| TGM.AX | Theta Gold Mines Ltd | 0.27 | 0.88 | 0.74 |
| TSO.AX | Tesoro Resources Ltd | 0 | 0.99 | 0.99 |
| Low | High | |
| Unlevered beta | 0.59 | 0.75 |
| Relevered beta | 0.36 | 0.39 |
| Adjusted relevered beta | 0.57 | 0.59 |
DGO.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 DGO.AX:
cost_of_equity (7.25%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.57) + 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.