MLX.AX WACC - Weighted Average Cost of Capital

The WACC of Metals X Ltd (MLX.AX) is 9.8%.

The Cost of Equity of Metals X Ltd (MLX.AX) is 9.90%.

The Cost of Debt of Metals X Ltd (MLX.AX) is 5.50%.

	Range	Selected
Cost of equity	8.40% - 11.40%	9.90%
Tax rate	23.10% - 29.80%	26.45%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.3% - 11.4%	9.8%

WACC

MLX.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.85	1.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	11.40%

Tax rate	23.10%	29.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	7.00%

After-tax WACC	8.3%	11.4%


Selected WACC	9.8%

MLX.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 MLX.AX:

cost_of_equity (9.90%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.85) + 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.