The WACC of Tanga Resources Ltd (TRL.AX) is 7.1%.
Range | Selected | |
Cost of equity | 8.8% - 12.5% | 10.65% |
Tax rate | 30.0% - 30.0% | 30% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.2% - 8.0% | 7.1% |
Category | Low | High |
Long-term bond rate | 3.7% | 4.2% |
Equity market risk premium | 4.7% | 5.7% |
Adjusted beta | 1.09 | 1.36 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.8% | 12.5% |
Tax rate | 30.0% | 30.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.2% | 8.0% |
Selected WACC | 7.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TRL.AX | Tanga Resources Ltd | 0.95 | 1.66 | 1 |
ACP.AX | Audalia Resources Ltd | 0.28 | -0.95 | -0.8 |
AQD.AX | Ausquest Ltd | 0 | 2.9 | 2.89 |
BAR.AX | Barra Resources Ltd | 0 | 1.25 | 1.25 |
CAZ.AX | Cazaly Resources Ltd | 0.02 | 2.95 | 2.91 |
CLZ.AX | Classic Minerals Ltd | 0.35 | 0.57 | 0.46 |
LSR.AX | Lodestar Minerals Ltd | 0.1 | 1.65 | 1.53 |
RIM.AX | Rimfire Pacific Mining N L | 0.89 | 1.16 | 0.72 |
RMX.AX | Red Mountain Mining Ltd | 0.03 | 0.65 | 0.64 |
SRZ.AX | Stellar Resources Ltd | 0 | 1.59 | 1.59 |
TMR.AX | Tempus Resources Ltd | 0.88 | 0.53 | 0.32 |
Low | High | |
Unlevered beta | 0.72 | 1.25 |
Relevered beta | 1.13 | 1.54 |
Adjusted relevered beta | 1.09 | 1.36 |
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 TRL.AX:
cost_of_equity (10.65%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (1.09) + 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.