KFM.AX WACC - Weighted Average Cost of Capital
The WACC of Kingfisher Mining Ltd (KFM.AX) is 9.0%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.6% | 9.1% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 7.6% - 10.4% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.71 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.6% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 7.6% | 10.4% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KFM.AX | Kingfisher Mining Ltd | 0.02 | 0.55 | 0.54 |
| ANW.AX | Aus Tin Mining Ltd | 0.4 | -0.03 | -0.02 |
| AOA.AX | Ausmon Resources Ltd | 0.16 | 1.01 | 0.91 |
| MQR.AX | Marquee Resources Ltd | 0.01 | 0.06 | 0.06 |
| NME.AX | Nex Metals Explorations Ltd | 0.07 | 1.67 | 1.59 |
| NWM.AX | Norwest Minerals Ltd | 0.04 | 1.07 | 1.05 |
| SUH.AX | Southern Hemisphere Mining Ltd | 0.02 | 2.04 | 2.02 |
| WML.AX | Woomera Mining Ltd | 0.02 | 0.62 | 0.61 |
| XTC.AX | Xantippe Resources Ltd | 0.02 | -0.15 | -0.14 |
| Low | High | |
| Unlevered beta | 0.56 | 0.85 |
| Relevered beta | 0.57 | 0.87 |
| Adjusted relevered beta | 0.71 | 0.91 |
KFM.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 KFM.AX:
cost_of_equity (9.10%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.71) + 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.