GFM.L WACC - Weighted Average Cost of Capital
The WACC of Griffin Mining Ltd (GFM.L) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.0% - 9.3% | 8.15% |
| Tax rate | 37.3% - 38.1% | 37.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.0% - 9.3% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.5 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.0% | 9.3% |
| Tax rate | 37.3% | 38.1% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.0% | 9.3% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GFM.L | Griffin Mining Ltd | 0 | 0.39 | 0.39 |
| AAZ.L | Anglo Asian Mining PLC | 0.09 | 0.47 | 0.44 |
| BCN.L | Bacanora Lithium PLC | 0.09 | 1.99 | 1.88 |
| BLS.SW | Blackstone Resources AG | 2.32 | 1.06 | 0.43 |
| DRIL.ST | Drillcon AB | 0.45 | 0.04 | 0.03 |
| HZM.L | Horizonte Minerals PLC | 176.22 | 1.19 | 0.01 |
| IKTIN.AT | Iktinos Hellas Greek Marble Industry SA | 0.96 | 1.38 | 0.86 |
| MTL.L | Metals Exploration PLC | 0.01 | 0.03 | 0.03 |
| RMM.L | Rambler Metals and Mining PLC | 2.83 | 1.92 | 0.7 |
| SAV.L | Savannah Resources Plc | 0 | -0.68 | -0.68 |
| Low | High | |
| Unlevered beta | 0.25 | 0.44 |
| Relevered beta | 0.25 | 0.43 |
| Adjusted relevered beta | 0.5 | 0.62 |
GFM.L'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 GFM.L:
cost_of_equity (8.15%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.