STA.L WACC - Weighted Average Cost of Capital
The WACC of Star Phoenix Group Ltd (STA.L) is 6.6%.
| Range | Selected | |
| Cost of equity | 6.7% - 10.2% | 8.45% |
| Tax rate | 3.6% - 6.7% | 5.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 7.4% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.45 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 10.2% |
| Tax rate | 3.6% | 6.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 7.4% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| STA.L | Star Phoenix Group Ltd | 1.09 | -4.21 | -2.08 |
| ATLA DKK.CO | Atlantic Petroleum P/F | 8.05 | 1.27 | 0.15 |
| BOIL.L | Baron Oil PLC | 0 | -1.33 | -1.33 |
| CORO.L | Coro Energy Plc | 4.75 | -0.15 | -0.03 |
| MLSEQ.PA | Sequa Petroleum NV | 105.67 | 0.93 | 0.01 |
| NTOG.L | Nostra Terra Oil and Gas Company PLC | 2.65 | 1.99 | 0.57 |
| PXEN.L | Prospex Energy PLC | 1.1 | 0.37 | 0.18 |
| TRP.L | Tower Resources PLC | 0 | -1.59 | -1.59 |
| ZOL.L | Zoltav Resources Inc | 1.03 | 0.48 | 0.24 |
| STX.AX | Strike Energy Ltd | 0.06 | 1.87 | 1.77 |
| WGO.AX | Warrego Energy Ltd | 0 | 1.83 | 1.83 |
| Low | High | |
| Unlevered beta | 0.01 | 0.18 |
| Relevered beta | 0.18 | 0.61 |
| Adjusted relevered beta | 0.45 | 0.74 |
STA.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 STA.L:
cost_of_equity (8.45%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.