FNT.AX WACC - Weighted Average Cost of Capital
The WACC of Frontier Resources Ltd (FNT.AX) is 7.6%.
| Range | Selected | |
| Cost of equity | 10.2% - 13.1% | 11.65% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 8.3% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.38 | 1.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.2% | 13.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 8.3% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FNT.AX | Frontier Resources Ltd | 0.91 | 0.76 | 0.46 |
| AEV.AX | Avenira Ltd | 1.03 | 0.41 | 0.24 |
| ANW.AX | Aus Tin Mining Ltd | 0.4 | -0.03 | -0.02 |
| GES.AX | Genesis Resources Ltd | 1.67 | -3.11 | -1.43 |
| GNM.AX | Great Northern Minerals Ltd | 1.05 | -0.31 | -0.18 |
| KFM.AX | Kingfisher Mining Ltd | 0.02 | 0.35 | 0.34 |
| NME.AX | Nex Metals Explorations Ltd | 0.06 | 1.57 | 1.51 |
| RMI.AX | Resource Mining Corporation Ltd | 0.01 | 1.68 | 1.67 |
| SRI.AX | Sipa Resources Ltd | 0.01 | 0.61 | 0.61 |
| TMG.AX | Trigg Mining Ltd | 0.88 | -0.09 | -0.05 |
| WML.AX | Woomera Mining Ltd | 0.02 | 0.62 | 0.61 |
| Low | High | |
| Unlevered beta | 0.24 | 0.46 |
| Relevered beta | 1.57 | 1.69 |
| Adjusted relevered beta | 1.38 | 1.46 |
FNT.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 FNT.AX:
cost_of_equity (11.65%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (1.38) + 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.