KRM.AX WACC - Weighted Average Cost of Capital
The WACC of Kingsrose Mining Ltd (KRM.AX) is 9.4%.
| Range | Selected | |
| Cost of equity | 7.2% - 11.6% | 9.4% |
| Tax rate | 6.4% - 8.1% | 7.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.2% - 11.6% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.62 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 11.6% |
| Tax rate | 6.4% | 8.1% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.2% | 11.6% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KRM.AX | Kingsrose Mining Ltd | 0 | 0.17 | 0.17 |
| AAU.AX | Antilles Gold Ltd | 0.02 | -0.45 | -0.44 |
| BCN.AX | Beacon Minerals Ltd | 0.08 | 0.01 | 0.01 |
| DGR.AX | DGR Global Ltd | 2.47 | 0.07 | 0.02 |
| LNY.AX | Laneway Resources Ltd | 0.41 | 1.87 | 1.36 |
| MAT.AX | Matsa Resources Ltd | 0.11 | 1.13 | 1.02 |
| NAG.AX | Nagambie Resources Ltd | 0.26 | 1.7 | 1.37 |
| NXM.AX | Nexus Minerals Ltd | 0 | 0.6 | 0.6 |
| STN.AX | Saturn Metals Ltd | 0 | 1.59 | 1.59 |
| TTM.AX | Titan Minerals Ltd | 0.01 | 1.29 | 1.28 |
| Low | High | |
| Unlevered beta | 0.43 | 1.12 |
| Relevered beta | 0.43 | 1.12 |
| Adjusted relevered beta | 0.62 | 1.08 |
KRM.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 KRM.AX:
cost_of_equity (9.40%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + 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.