GPR.AX WACC - Weighted Average Cost of Capital
The WACC of Geopacific Resources Ltd (GPR.AX) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.5% - 8.7% | 7.6% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.3% - 8.5% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.48 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 8.7% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.3% | 8.5% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GPR.AX | Geopacific Resources Ltd | 0.04 | 1.12 | 1.09 |
| AXE.AX | Archer Materials Ltd | 0 | 0.22 | 0.22 |
| G1A.AX | Galena Mining Ltd | 4.81 | -0.57 | -0.13 |
| GLN.AX | Galan Lithium Ltd | 0.01 | -0.6 | -0.59 |
| MGV.AX | Musgrave Minerals Ltd | 0 | 0.14 | 0.14 |
| POS.AX | Poseidon Nickel Ltd | 0.01 | 1.95 | 1.93 |
| SVM.AX | Sovereign Metals Ltd | 0 | 0.63 | 0.63 |
| SVY.AX | Stavely Minerals Ltd | 0.03 | 0.21 | 0.21 |
| VRX.AX | VRX Silica Ltd | 0.01 | 0.25 | 0.24 |
| VXR.AX | Venturex Resources Ltd | 0 | 0.86 | 0.86 |
| Low | High | |
| Unlevered beta | 0.22 | 0.4 |
| Relevered beta | 0.22 | 0.42 |
| Adjusted relevered beta | 0.48 | 0.61 |
GPR.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 GPR.AX:
cost_of_equity (7.60%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.