GCY.AX WACC - Weighted Average Cost of Capital
The WACC of Gascoyne Resources Ltd (GCY.AX) is 8.8%.
| Range | Selected | |
| Cost of equity | 6.4% - 11.6% | 9% |
| Tax rate | 4.7% - 6.1% | 5.4% |
| Cost of debt | 4.0% - 4.9% | 4.45% |
| WACC | 6.3% - 11.4% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 4.1% | 4.6% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.41 | 1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 11.6% |
| Tax rate | 4.7% | 6.1% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.0% | 4.9% |
| After-tax WACC | 6.3% | 11.4% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GCY.AX | Gascoyne Resources Ltd | 0.03 | 1.81 | 1.76 |
| AAU.AX | Antilles Gold Ltd | 0.02 | -0.45 | -0.44 |
| KRM.AX | Kingsrose Mining Ltd | 0 | 0.17 | 0.17 |
| MML.AX | Medusa Mining Ltd | 0.04 | -1.32 | -1.28 |
| NWF.AX | Newfield Resources Ltd | 0.03 | -0.48 | -0.47 |
| PNR.AX | Pantoro Ltd | 0.04 | 1.43 | 1.37 |
| RED.AX | Red 5 Ltd | 0.09 | 0.47 | 0.43 |
| RND.AX | Rand Mining Ltd | 1.01 | 0.28 | 0.15 |
| TBR.AX | Tribune Resources Ltd | 1.1 | 0.65 | 0.32 |
| TSO.AX | Tesoro Resources Ltd | 0 | 1.13 | 1.13 |
| Low | High | |
| Unlevered beta | 0.16 | 0.37 |
| Relevered beta | 0.12 | 1 |
| Adjusted relevered beta | 0.41 | 1 |
GCY.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 GCY.AX:
cost_of_equity (9.00%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (0.41) + 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.