VMC.AX WACC - Weighted Average Cost of Capital
The WACC of Venus Metals Corporation Ltd (VMC.AX) is 11.1%.
| Range | Selected | |
| Cost of equity | 9.3% - 13.0% | 11.15% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.3% - 13.0% | 11.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.04 | 1.3 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 13.0% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.3% | 13.0% |
| Selected WACC | 11.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VMC.AX | Venus Metals Corporation Ltd | 0 | -1.08 | -1.08 |
| AGD.AX | Austral Gold Ltd | 1.11 | 1.51 | 0.85 |
| AGR.AX | Aguia Resources Ltd | 0 | 1.06 | 1.05 |
| AQX.AX | Alice Queen Ltd | 0.03 | 1.49 | 1.46 |
| CNB.AX | Carnaby Resources Ltd | 0 | 1.52 | 1.51 |
| COD.AX | Coda Minerals Ltd | 0.01 | 1.86 | 1.85 |
| LOM.AX | Lucapa Diamond Co Ltd | 0.15 | 1.86 | 1.68 |
| MKR.AX | Manuka Resources Ltd | 1.01 | -0.1 | -0.06 |
| NAG.AX | Nagambie Resources Ltd | 0.26 | 1.7 | 1.44 |
| TAO.AX | Tao Commodities Ltd | 0 | 1.05 | 1.05 |
| Low | High | |
| Unlevered beta | 1.05 | 1.45 |
| Relevered beta | 1.06 | 1.45 |
| Adjusted relevered beta | 1.04 | 1.3 |
VMC.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 VMC.AX:
cost_of_equity (11.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.04) + 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.