RCP.AX WACC - Weighted Average Cost of Capital
The WACC of Redbank Copper Ltd (RCP.AX) is 8.7%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.6% | 8.95% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.1% - 10.2% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.76 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.6% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.1% | 10.2% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RCP.AX | Redbank Copper Ltd | 0.05 | -0.15 | -0.15 |
| AIS.AX | Aeris Resources Ltd | 0.35 | 0.77 | 0.62 |
| CYM.AX | Cyprium Metals Ltd | 0.84 | 2.27 | 1.43 |
| DME.AX | Dome Gold Mines Ltd | 0.01 | -0.52 | -0.52 |
| ENR.AX | Encounter Resources Ltd | 0 | 0.72 | 0.71 |
| EQR.AX | EQ Resources Ltd | 0.47 | 0.28 | 0.21 |
| OZL.AX | OZ Minerals Ltd | 0.12 | 1.12 | 1.03 |
| PDZ.AX | Prairie Mining Ltd | 0 | 0.43 | 0.43 |
| S2R.AX | S2 Resources Ltd | 0 | -0.59 | -0.59 |
| SFR.AX | Sandfire Resources Ltd | 0.11 | 1.89 | 1.75 |
| Low | High | |
| Unlevered beta | 0.34 | 0.66 |
| Relevered beta | 0.64 | 1.04 |
| Adjusted relevered beta | 0.76 | 1.03 |
RCP.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 RCP.AX:
cost_of_equity (8.95%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.76) + 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.