NVA.AX WACC - Weighted Average Cost of Capital
The WACC of Nova Minerals Ltd (NVA.AX) is 6.9%.
| Range | Selected | |
| Cost of equity | 6.1% - 8.2% | 7.15% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 7.9% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.42 | 0.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 8.2% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 7.9% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NVA.AX | Nova Minerals Ltd | 0.07 | 0.1 | 0.1 |
| CTM.AX | Centaurus Metals Ltd | 0 | 0.92 | 0.92 |
| CXO.AX | Core Lithium Ltd | 0.02 | 2.08 | 2.06 |
| G1A.AX | Galena Mining Ltd | 4.81 | -0.57 | -0.13 |
| HAS.AX | Hastings Technology Metals Ltd | 3.2 | 1.2 | 0.37 |
| KGL.AX | KGL Resources Ltd | 0 | -0.3 | -0.3 |
| MAU.AX | Magnetic Resources NL | 0 | -0.14 | -0.14 |
| MGV.AX | Musgrave Minerals Ltd | 0 | 0.14 | 0.14 |
| MNS.AX | Magnis Energy Technologies Ltd | 0.12 | 1.15 | 1.06 |
| NTU.AX | Northern Minerals Ltd | 0.06 | 0.2 | 0.19 |
| Low | High | |
| Unlevered beta | 0.12 | 0.26 |
| Relevered beta | 0.13 | 0.27 |
| Adjusted relevered beta | 0.42 | 0.51 |
NVA.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 NVA.AX:
cost_of_equity (7.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.42) + 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.