The WACC of Kaz Minerals PLC (KAZ.L) is 9.8%.
| Range | Selected | |
| Cost of equity | 12.00% - 16.50% | 14.25% |
| Tax rate | 20.50% - 20.90% | 20.70% |
| Cost of debt | 4.70% - 6.20% | 5.45% |
| WACC | 8.3% - 11.4% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 1.69 | 1.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.00% | 16.50% |
| Tax rate | 20.50% | 20.90% |
| Debt/Equity ratio | 0.8 | 0.8 |
| Cost of debt | 4.70% | 6.20% |
| After-tax WACC | 8.3% | 11.4% |
| Selected WACC | 9.8% | |
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 KAZ.L:
cost_of_equity (14.25%) = risk_free_rate (3.15%) + equity_risk_premium (5.80%) * adjusted_beta (1.69) + 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.