EMR.AX WACC - Weighted Average Cost of Capital
The WACC of Emerald Resources NL (EMR.AX) is 7.6%.
| Range | Selected | |
| Cost of equity | 5.8% - 9.5% | 7.65% |
| Tax rate | 14.5% - 25.6% | 20.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 9.5% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.36 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 9.5% |
| Tax rate | 14.5% | 25.6% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 9.5% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EMR.AX | Emerald Resources NL | 0.02 | 1.21 | 1.19 |
| ALK.AX | Alkane Resources Ltd | 0.03 | 1.32 | 1.29 |
| BCN.AX | Beacon Minerals Ltd | 0.08 | 0.01 | 0.01 |
| CAI.AX | Calidus Resources Ltd | 0.87 | -0.33 | -0.2 |
| CYL.AX | Catalyst Metals Ltd | 0 | 0.32 | 0.32 |
| DGO.AX | DGO Gold Ltd | 0 | -0.61 | -0.61 |
| KCN.AX | Kingsgate Consolidated Ltd | 0.11 | 1.19 | 1.1 |
| NWF.AX | Newfield Resources Ltd | 0.03 | -0.48 | -0.47 |
| OBM.AX | Ora Banda Mining Ltd | 0.01 | 1.04 | 1.03 |
| VAN.AX | Vango Mining Ltd | 0.03 | 0.06 | 0.06 |
| Low | High | |
| Unlevered beta | 0.04 | 0.61 |
| Relevered beta | 0.04 | 0.61 |
| Adjusted relevered beta | 0.36 | 0.74 |
EMR.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 EMR.AX:
cost_of_equity (7.65%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.