IBG.AX WACC - Weighted Average Cost of Capital
The WACC of Ironbark Zinc Ltd (IBG.AX) is 6.5%.
| Range | Selected | |
| Cost of equity | 6.7% - 12.1% | 9.4% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 7.8% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.52 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 12.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 7.8% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IBG.AX | Ironbark Zinc Ltd | 0.99 | -2.74 | -1.62 |
| AGR.AX | Aguia Resources Ltd | 0 | 0.96 | 0.96 |
| AMG.AX | Ausmex Mining Group Ltd | 0.02 | 0.56 | 0.56 |
| AQX.AX | Alice Queen Ltd | 0.04 | 1.07 | 1.04 |
| COD.AX | Coda Minerals Ltd | 0.01 | 1.72 | 1.71 |
| CWX.AX | Carawine Resources Ltd | 0 | -0.36 | -0.35 |
| LSA.AX | Lachlan Star Ltd | 0.01 | 2.62 | 2.6 |
| MCT.AX | Metalicity Ltd | 0 | -1.83 | -1.83 |
| MTC.AX | Metalstech Ltd | 0.05 | -2.27 | -2.2 |
| OAR.AX | OAR Resources Ltd | 0.18 | 0.15 | 0.13 |
| PNX.AX | PNX Metals Ltd | 0.01 | -0.84 | -0.84 |
| Low | High | |
| Unlevered beta | -0.35 | 0.56 |
| Relevered beta | 0.28 | 1.24 |
| Adjusted relevered beta | 0.52 | 1.16 |
IBG.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 IBG.AX:
cost_of_equity (9.40%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.52) + 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.