RBW.L
Rainbow Rare Earths Ltd
Price:  
12.50 
GBP
Volume:  
2,443,179.00
Guernsey | Metals & Mining
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RBW.L WACC - Weighted Average Cost of Capital

The WACC of Rainbow Rare Earths Ltd (RBW.L) is 10.1%.

The Cost of Equity of Rainbow Rare Earths Ltd (RBW.L) is 10.10%.
The Cost of Debt of Rainbow Rare Earths Ltd (RBW.L) is 5.00%.

Range Selected
Cost of equity 8.80% - 11.40% 10.10%
Tax rate -% - 0.10% 0.05%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.8% - 11.4% 10.1%
WACC

RBW.L WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.8 0.92
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.40%
Tax rate -% 0.10%
Debt/Equity ratio 0.01 0.01
Cost of debt 5.00% 5.00%
After-tax WACC 8.8% 11.4%
Selected WACC 10.1%

RBW.L'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 RBW.L:

cost_of_equity (10.10%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.8) + 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.