GRL.L WACC - Weighted Average Cost of Capital
The WACC of GoldStone Resources Ltd (GRL.L) is 5.6%.
| Range | Selected | |
| Cost of equity | 6.0% - 7.5% | 6.75% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.2% - 6.1% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.34 | 0.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 7.5% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 0.7 | 0.7 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.2% | 6.1% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GRL.L | GoldStone Resources Ltd | 0.7 | 0.96 | 0.61 |
| BZT.L | Bezant Resources PLC | 0.13 | 0.78 | 0.71 |
| CGNR.L | Conroy Gold and Natural Resources PLC | 0.07 | -1.76 | -1.67 |
| CNG.L | China Nonferrous Gold Ltd | 57.46 | 1.31 | 0.03 |
| CORA.L | Cora Gold Ltd | 0.3 | -0.27 | -0.22 |
| ENDO.ST | Endomines AB (publ) | 0.53 | 0.39 | 0.27 |
| KOPY.ST | Kopy Goldfields AB (publ) | 4.08 | 0.13 | 0.03 |
| POG.L | Petropavlovsk PLC | 11.14 | 0.24 | 0.02 |
| SGZ.L | Scotgold Resources Ltd | 1.08 | -0.04 | -0.02 |
| XTR.L | Xtract Resources PLC | 0.01 | -0.1 | -0.1 |
| Low | High | |
| Unlevered beta | 0.01 | 0.03 |
| Relevered beta | 0.01 | 0.04 |
| Adjusted relevered beta | 0.34 | 0.36 |
GRL.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 GRL.L:
cost_of_equity (6.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.34) + 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.