HZM.L WACC - Weighted Average Cost of Capital
The WACC of Horizonte Minerals PLC (HZM.L) is 6.5%.
| Range | Selected | |
| Cost of equity | 312.3% - 577.9% | 445.1% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 7.3% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 51.55 | 82.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 312.3% | 577.9% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 176.22 | 176.22 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 7.3% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HZM.L | Horizonte Minerals PLC | 176.22 | 1.19 | 0.01 |
| AAL.L | Anglo American PLC | 0.53 | 1.81 | 1.27 |
| ALS.L | Altus Strategies PLC | 0.37 | 1.14 | 0.88 |
| ATM.L | AfriTin Mining Ltd | 0.28 | 0.79 | 0.64 |
| BCN.L | Bacanora Lithium PLC | 0.09 | 1.99 | 1.85 |
| BLS.SW | Blackstone Resources AG | 2.32 | 1.06 | 0.37 |
| COPP B.ST | Copperstone Resources AB (publ) | 0.02 | 0.22 | 0.22 |
| PREM.L | Premier African Minerals Ltd | 0.11 | 2.02 | 1.85 |
| RBW.L | Rainbow Rare Earths Ltd | 0.01 | 0.83 | 0.83 |
| SAV.L | Savannah Resources Plc | 0 | -0.41 | -0.41 |
| Low | High | |
| Unlevered beta | 0.53 | 0.85 |
| Relevered beta | 76.45 | 122 |
| Adjusted relevered beta | 51.55 | 82.07 |
HZM.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 HZM.L:
cost_of_equity (445.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (51.55) + 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.