MCM.AX WACC - Weighted Average Cost of Capital

The WACC of MC Mining Ltd (MCM.AX) is 8.2%.

The Cost of Equity of MC Mining Ltd (MCM.AX) is 10.70%.

The Cost of Debt of MC Mining Ltd (MCM.AX) is 4.30%.

	Range	Selected
Cost of equity	8.60% - 12.80%	10.70%
Tax rate	2.60% - 3.70%	3.15%
Cost of debt	4.00% - 4.60%	4.30%
WACC	6.8% - 9.7%	8.2%

WACC

MCM.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.9	1.28

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	12.80%

Tax rate	2.60%	3.70%
Debt/Equity ratio	0.61	0.61
Cost of debt	4.00%	4.60%

After-tax WACC	6.8%	9.7%


Selected WACC	8.2%

MCM.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 MCM.AX:

cost_of_equity (10.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.9) + 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.