The WACC of Great Western Mining Corporation PLC (GWMO.L) is 6.8%.
Range | Selected | |
Cost of equity | 7.3% - 11.8% | 9.55% |
Tax rate | 19.0% - 19.0% | 19% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.7% - 7.9% | 6.8% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.55 | 0.97 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.3% | 11.8% |
Tax rate | 19.0% | 19.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.7% | 7.9% |
Selected WACC | 6.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GWMO.L | Great Western Mining Corporation PLC | 1 | 0.48 | 0.27 |
ARCT.ST | Arctic Minerals AB | 0.86 | -1.26 | -0.75 |
AYM.L | Anglesey Mining PLC | 0.95 | 0.26 | 0.15 |
BOTX.ST | Botnia Exploration Holding AB (publ) | 0.03 | 0.21 | 0.21 |
CRCL.L | Corcel PLC | 0.12 | 1.14 | 1.04 |
EEE.L | Empire Metals Ltd | 0 | 0.8 | 0.8 |
KMR.L | Kenmare Resources PLC | 0.17 | 0.41 | 0.36 |
MNRG.L | Metalnrg PLC | 0.18 | 1.62 | 1.41 |
NOM.OL | Nordic Mining ASA | 0.42 | 1.05 | 0.79 |
THR.L | Thor Mining PLC | 0.01 | -0.5 | -0.5 |
WRES.L | W Resources PLC | 17.51 | 1.72 | 0.11 |
Low | High | |
Unlevered beta | 0.21 | 0.36 |
Relevered beta | 0.33 | 0.96 |
Adjusted relevered beta | 0.55 | 0.97 |
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 GWMO.L:
cost_of_equity (9.55%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.