GSN.AX WACC - Weighted Average Cost of Capital
The WACC of Great Southern Mining Ltd (GSN.AX) is 6.8%.
| Range | Selected | |
| Cost of equity | 6.0% - 7.6% | 6.8% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.0% - 7.5% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.39 | 0.41 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 7.6% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.0% | 7.5% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GSN.AX | Great Southern Mining Ltd | 0.01 | 0.84 | 0.84 |
| ADY.AX | Admiralty Resources NL | 1.33 | 0.24 | 0.12 |
| AMG.AX | Ausmex Mining Group Ltd | 0.02 | 0.56 | 0.56 |
| CNB.AX | Carnaby Resources Ltd | 0 | 1.47 | 1.47 |
| CXM.AX | Centrex Metals Ltd | 0.55 | -0.42 | -0.3 |
| IDA.AX | Indiana Resources Ltd | 0 | 0.08 | 0.08 |
| MCT.AX | Metalicity Ltd | 0 | -1.83 | -1.83 |
| OAR.AX | OAR Resources Ltd | 0.18 | 0.15 | 0.13 |
| PNX.AX | PNX Metals Ltd | 0.01 | -0.84 | -0.84 |
| SRN.AX | Surefire Resources NL | 0.02 | 0.1 | 0.1 |
| Low | High | |
| Unlevered beta | 0.09 | 0.13 |
| Relevered beta | 0.09 | 0.12 |
| Adjusted relevered beta | 0.39 | 0.41 |
GSN.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 GSN.AX:
cost_of_equity (6.80%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.39) + 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.