PLL WACC - Weighted Average Cost of Capital
The WACC of Piedmont Lithium Inc (PLL) is 14.2%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.6% | 8.4% |
| Tax rate | 2.8% - 9.4% | 6.1% |
| Cost of debt | 7.0% - 78.1% | 42.55% |
| WACC | 7.1% - 21.2% | 14.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.72 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.6% |
| Tax rate | 2.8% | 9.4% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 7.0% | 78.1% |
| After-tax WACC | 7.1% | 21.2% |
| Selected WACC | 14.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PLL | Piedmont Lithium Inc | 0.23 | 1.27 | 1.04 |
| CMP | Compass Minerals International Inc | 1.12 | 0.98 | 0.47 |
| MIN.TO | Excelsior Mining Corp | 0.58 | 0.35 | 0.23 |
| MP | Mp Materials Corp | 0.17 | 0.74 | 0.63 |
| MTRN | Materion Corp | 0.27 | 1.33 | 1.05 |
| NB.TO | NioCorp Developments Ltd | 0.05 | -1.78 | -1.7 |
| Low | High | |
| Unlevered beta | 0.47 | 0.63 |
| Relevered beta | 0.58 | 0.78 |
| Adjusted relevered beta | 0.72 | 0.85 |
PLL'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 PLL:
cost_of_equity (8.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.