The WACC of Ormonde Mining PLC (ORQ1.IR) is 5.0%.
| Range | Selected | |
| Cost of equity | 3.20% - 8.00% | 5.60% |
| Tax rate | 12.50% - 12.50% | 12.50% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 3.8% - 6.2% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | -0.08 | 0.48 |
| Additional risk adjustments | 1.0% | 1.5% |
| Cost of equity | 3.20% | 8.00% |
| Tax rate | 12.50% | 12.50% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 3.8% | 6.2% |
| Selected WACC | 5.0% | |
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 ORQ1.IR:
cost_of_equity (5.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.50%) * adjusted_beta (-0.08) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.