VMS.AX WACC - Weighted Average Cost of Capital
The WACC of Venture Minerals Ltd (VMS.AX) is 7.5%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.2% | 7.45% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 5.7% - 9.2% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.34 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.2% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 5.7% | 9.2% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VMS.AX | Venture Minerals Ltd | 0 | -0.47 | -0.47 |
| AML.AX | Aeon Metals Ltd | 6.37 | -0.1 | -0.02 |
| AVL.AX | Australian Vanadium Ltd | 0.02 | 0.78 | 0.77 |
| AZY.AX | Antipa Minerals Ltd | 0 | 0.94 | 0.94 |
| BML.AX | Boab Metals Ltd | 0 | 2.12 | 2.11 |
| DRX.AX | Diatreme Resources Ltd | 0.01 | 1.35 | 1.34 |
| KRR.AX | King River Resources Ltd | 0 | 0.24 | 0.24 |
| MEI.AX | Meteoric Resources NL | 0 | 2.26 | 2.26 |
| PSC.AX | Prospect Resources Ltd | 0 | 0.6 | 0.6 |
| QPM.AX | Queensland Pacific Metals Ltd | 0.54 | 1.11 | 0.8 |
| Low | High | |
| Unlevered beta | 0.7 | 0.86 |
| Relevered beta | 0.01 | 0.54 |
| Adjusted relevered beta | 0.34 | 0.69 |
VMS.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 VMS.AX:
cost_of_equity (7.45%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.34) + 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.