ERL.AX WACC - Weighted Average Cost of Capital
The WACC of Empire Resources Ltd (ERL.AX) is 6.3%.
| Range | Selected | |
| Cost of equity | 6.3% - 12.4% | 9.35% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 4.8% - 7.8% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.46 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 12.4% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 4.8% | 7.8% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ERL.AX | Empire Resources Ltd | 0.03 | 1.83 | 1.79 |
| ANW.AX | Aus Tin Mining Ltd | 0.4 | -0.03 | -0.02 |
| AUQ.AX | Alara Resources Ltd | 3.87 | 0.56 | 0.15 |
| CBY.AX | Canterbury Resources Ltd | 0.07 | -0.18 | -0.17 |
| CXX.AX | Cradle Resources Ltd | 0 | 1.54 | 1.54 |
| FAU.AX | First Au Ltd | 0 | -1.64 | -1.63 |
| HLX.AX | Helix Resources Ltd | 0.07 | 1.21 | 1.16 |
| MRD.AX | Mount Ridley Mines Ltd | 0.02 | 1.54 | 1.52 |
| MRR.AX | Minrex Resources Ltd | 0.01 | 0.05 | 0.05 |
| SCN.AX | Scorpion Minerals Ltd | 0.08 | 0.55 | 0.52 |
| SHH.AX | Shree Minerals Ltd | 0 | 1.91 | 1.91 |
| Low | High | |
| Unlevered beta | 0.15 | 1.16 |
| Relevered beta | 0.19 | 1.31 |
| Adjusted relevered beta | 0.46 | 1.21 |
ERL.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 ERL.AX:
cost_of_equity (9.35%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.46) + 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.