GPM.L WACC - Weighted Average Cost of Capital
The WACC of Golden Prospect Precious Metals Ltd (GPM.L) is 6.8%.
| Range | Selected | |
| Cost of equity | 6.1% - 7.8% | 6.95% |
| Tax rate | 0.2% - 0.2% | 0.2% |
| Cost of debt | 4.3% - 4.6% | 4.45% |
| WACC | 6.0% - 7.6% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.35 | 0.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 7.8% |
| Tax rate | 0.2% | 0.2% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 4.3% | 4.6% |
| After-tax WACC | 6.0% | 7.6% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GPM.L | Golden Prospect Precious Metals Ltd | 0.07 | 0.8 | 0.74 |
| ARCPF.AS | Arcona Property Fund NV | 1.09 | 0.2 | 0.1 |
| GV1O.L | Gresham House Renewable Energy VCT 1 PLC | 0.12 | -0.05 | -0.05 |
| MPO.L | Macau Property Opportunities Fund Ltd | 3.81 | 0.56 | 0.12 |
| PMGR.L | Premier Miton Global Renewables Trust PLC | 0.95 | 1.34 | 0.69 |
| ROMSB.OL | Romsdal Sparebank | 0.18 | -0.02 | -0.02 |
| ZAIM.L | Zaim Credit Systems PLC | 0.99 | -0.79 | -0.39 |
| Low | High | |
| Unlevered beta | 0.03 | 0.11 |
| Relevered beta | 0.03 | 0.12 |
| Adjusted relevered beta | 0.35 | 0.41 |
GPM.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 GPM.L:
cost_of_equity (6.95%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.