SRZ.AX
Stellar Resources Ltd
Price:  
0.02 
AUD
Volume:  
64,376.00
Australia | Metals & Mining
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SRZ.AX WACC - Weighted Average Cost of Capital

The WACC of Stellar Resources Ltd (SRZ.AX) is 9.5%.

The Cost of Equity of Stellar Resources Ltd (SRZ.AX) is 9.45%.
The Cost of Debt of Stellar Resources Ltd (SRZ.AX) is 4.25%.

Range Selected
Cost of equity 7.70% - 11.20% 9.45%
Tax rate 30.00% - 30.00% 30.00%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.7% - 11.2% 9.5%
WACC

SRZ.AX WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.72 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 11.20%
Tax rate 30.00% 30.00%
Debt/Equity ratio 0 0
Cost of debt 4.00% 4.50%
After-tax WACC 7.7% 11.2%
Selected WACC 9.5%

SRZ.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 SRZ.AX:

cost_of_equity (9.45%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * 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.