The WACC of Au Min Africa Pty Ltd (GRYEF) is 6.7%.
Range | Selected | |
Cost of equity | 7.5% - 12.1% | 9.8% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.6% - 7.9% | 6.7% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.79 | 1.3 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.5% | 12.1% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.6% | 7.9% |
Selected WACC | 6.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GRYEF | Au Min Africa Pty Ltd | 0.85 | 0 | 0 |
AAX.V | Advance Gold Corp | 0.03 | 1.15 | 1.13 |
ACP.V | ArcPacific Resources Corp | 0.03 | 0.96 | 0.94 |
CRTS.V | Cortus Metals Inc | 0.16 | -0.37 | -0.33 |
FTJ.V | Fort St James Nickel Corp | 0.11 | -0.02 | -0.02 |
GCP.CN | Golcap Resources Corp | 0 | 0.62 | 0.62 |
GGX.V | Ggx Gold Corp | 0.6 | -1.45 | -1.01 |
GOFF | Goff Corp | 0.84 | 1.39 | 0.86 |
IMI.V | International Millennium Mining Corp | 0.02 | 0.07 | 0.07 |
KEN.V | Kenadyr Mining Corp | 0.14 | 1.78 | 1.61 |
NXU.CN | Nexco Resources Inc | 0.59 | 1.09 | 0.76 |
Low | High | |
Unlevered beta | 0.07 | 0.76 |
Relevered beta | 0.69 | 1.45 |
Adjusted relevered beta | 0.79 | 1.3 |
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 GRYEF:
cost_of_equity (9.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.