VMY.AX WACC - Weighted Average Cost of Capital
The WACC of Vimy Resources Ltd (VMY.AX) is 7.3%.
| Range | Selected | |
| Cost of equity | 8.5% - 13.8% | 11.15% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 8.6% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.87 | 1.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 13.8% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 8.6% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VMY.AX | Vimy Resources Ltd | 1.02 | 1.88 | 1.09 |
| AGE.AX | Alligator Energy Ltd | 0 | 2.01 | 2.01 |
| AUH.AX | Austchina Holdings Ltd | 0.55 | 0.85 | 0.62 |
| DEV.AX | DevEx Resources Ltd | 0.01 | 1.5 | 1.49 |
| EME.AX | Energy Metals Ltd | 0 | 0.27 | 0.27 |
| KLR.AX | Kaili Resources Ltd | 3.9 | -1.2 | -0.32 |
| LCK.AX | Leigh Creek Energy Ltd | 0 | 1.62 | 1.62 |
| MEU.AX | Marmota Ltd | 0 | 1.28 | 1.28 |
| MEY.AX | Marenica Energy Ltd | 0 | 0.76 | 0.76 |
| REY.AX | Rey Resources Ltd | 2.61 | -0.93 | -0.33 |
| WEC.AX | White Energy Company Ltd | 2.97 | -0.17 | -0.05 |
| Low | High | |
| Unlevered beta | 0.62 | 1.09 |
| Relevered beta | 0.81 | 1.64 |
| Adjusted relevered beta | 0.87 | 1.43 |
VMY.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 VMY.AX:
cost_of_equity (11.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.87) + 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.