WAF.AX WACC - Weighted Average Cost of Capital
The WACC of West African Resources Ltd (WAF.AX) is 10.7%.
| Range | Selected | |
| Cost of equity | 10.4% - 13.0% | 11.7% |
| Tax rate | 29.5% - 30.7% | 30.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 9.4% - 11.9% | 10.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.25 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.4% | 13.0% |
| Tax rate | 29.5% | 30.7% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 9.4% | 11.9% |
| Selected WACC | 10.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| WAF.AX | West African Resources Ltd | 0.15 | 0.43 | 0.39 |
| ALK.AX | Alkane Resources Ltd | 0.03 | 1.32 | 1.29 |
| AUT.AX | Auteco Minerals Ltd | 0.01 | 1.84 | 1.82 |
| BDC.AX | Bardoc Gold Ltd | 0.01 | 1.5 | 1.49 |
| BGL.AX | Bellevue Gold Ltd | 0.21 | 0.82 | 0.71 |
| DGO.AX | DGO Gold Ltd | 0 | -0.61 | -0.61 |
| EMR.AX | Emerald Resources NL | 0.02 | 1.21 | 1.2 |
| GMD.AX | Genesis Minerals Ltd | 0.01 | 1.38 | 1.37 |
| PNR.AX | Pantoro Ltd | 0.04 | 1.43 | 1.38 |
| TTM.AX | Titan Minerals Ltd | 0.01 | 1.29 | 1.28 |
| Low | High | |
| Unlevered beta | 1.25 | 1.32 |
| Relevered beta | 1.37 | 1.46 |
| Adjusted relevered beta | 1.25 | 1.31 |
WAF.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 WAF.AX:
cost_of_equity (11.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.25) + 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.