PNN.AX
Pepinnini Minerals Ltd
Price:  
0.06 
AUD
Volume:  
1,173,155
Australia | Metals & Mining

PNN.AX WACC - Weighted Average Cost of Capital

The WACC of Pepinnini Minerals Ltd (PNN.AX) is 9.6%.

The Cost of Equity of Pepinnini Minerals Ltd (PNN.AX) is 10.35%.
The Cost of Debt of Pepinnini Minerals Ltd (PNN.AX) is 5%.

RangeSelected
Cost of equity8.4% - 12.3%10.35%
Tax rate2.6% - 4.2%3.4%
Cost of debt5.0% - 5.0%5%
WACC7.9% - 11.2%9.6%
WACC

PNN.AX WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium5.1%6.1%
Adjusted beta0.871.19
Additional risk adjustments0.0%0.5%
Cost of equity8.4%12.3%
Tax rate2.6%4.2%
Debt/Equity ratio
0.160.16
Cost of debt5.0%5.0%
After-tax WACC7.9%11.2%
Selected WACC9.6%

PNN.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 PNN.AX:

cost_of_equity (10.35%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.87) + 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.