GBE.AX WACC - Weighted Average Cost of Capital
The WACC of Globe Metals and Mining Ltd (GBE.AX) is 5.3%.
| Range | Selected | |
| Cost of equity | 3.7% - 10.6% | 7.15% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.6% - 7.1% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | -0.07 | 0.92 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.7% | 10.6% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.6% | 7.1% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GBE.AX | Globe Metals and Mining Ltd | 0.08 | 0.04 | 0.03 |
| A1M.AX | AIC Mines Ltd | 0.04 | 1.67 | 1.63 |
| ACP.AX | Audalia Resources Ltd | 0.35 | -0.89 | -0.71 |
| ANX.AX | Anax Metals Ltd | 0.4 | -0.37 | -0.29 |
| GIB.AX | GIBB River Diamonds Ltd | 0 | -0.82 | -0.82 |
| IDA.AX | Indiana Resources Ltd | 0 | 0.07 | 0.07 |
| MAG.AX | Magmatic Resources Ltd | 0.04 | 1.5 | 1.46 |
| MCT.AX | Metalicity Ltd | 0 | -1.83 | -1.83 |
| QEM.AX | QEM Ltd | 0 | 1.2 | 1.19 |
| RIE.AX | Riedel Resources Ltd | 0.02 | -0.44 | -0.43 |
| SHN.AX | Sunshine Gold Ltd | 0.01 | 1.87 | 1.86 |
| Low | High | |
| Unlevered beta | -0.29 | 0.07 |
| Relevered beta | -0.6 | 0.88 |
| Adjusted relevered beta | -0.07 | 0.92 |
GBE.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 GBE.AX:
cost_of_equity (7.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (-0.07) + 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.