The WACC of Santana Minerals Ltd (SMI.AX) is 8.1%.
Range | Selected | |
Cost of equity | 6.8% - 9.5% | 8.15% |
Tax rate | 30.0% - 30.0% | 30% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.8% - 9.5% | 8.1% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.54 | 0.73 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 9.5% |
Tax rate | 30.0% | 30.0% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.8% | 9.5% |
Selected WACC | 8.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SMI.AX | Santana Minerals Ltd | 0 | 1.91 | 1.91 |
GBR.AX | Great Boulder Resources Ltd | 0 | -0.85 | -0.85 |
KTA.AX | Krakatoa Resources Ltd | 0.01 | 0.62 | 0.62 |
NPM.AX | Newpeak Metals Ltd | 0.08 | -0.41 | -0.39 |
OAU.AX | Ora Gold Ltd | 0.09 | -0.78 | -0.74 |
PUA.AX | Peak Minerals Ltd | 0 | 0.59 | 0.59 |
SAU.AX | Southern Gold Ltd | 0.01 | 1.29 | 1.28 |
STK.AX | Strickland Metals Ltd | 0 | 0.49 | 0.49 |
Low | High | |
Unlevered beta | 0.31 | 0.6 |
Relevered beta | 0.31 | 0.6 |
Adjusted relevered beta | 0.54 | 0.73 |
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 SMI.AX:
cost_of_equity (8.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.54) + 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.