WHC.AX WACC - Weighted Average Cost of Capital
The WACC of Whitehaven Coal Ltd (WHC.AX) is 9.6%.
| Range | Selected | |
| Cost of equity | 10.5% - 13.8% | 12.15% |
| Tax rate | 29.3% - 29.6% | 29.45% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 8.1% - 11.1% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.26 | 1.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.5% | 13.8% |
| Tax rate | 29.3% | 29.6% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 8.1% | 11.1% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| WHC.AX | Whitehaven Coal Ltd | 0.44 | 1.06 | 0.81 |
| DEV.AX | DevEx Resources Ltd | 0.01 | 1.7 | 1.69 |
| ERA.AX | Energy Resources Of Australia Ltd | 0 | 1.2 | 1.2 |
| LCK.AX | Leigh Creek Energy Ltd | 0 | 1.62 | 1.62 |
| MCM.AX | MC Mining Ltd | 0.63 | 1.23 | 0.85 |
| NHC.AX | New Hope Corporation Ltd | 0.11 | 0.88 | 0.82 |
| PEN.AX | Peninsula Energy Ltd | 0 | 1.3 | 1.3 |
| SMR.AX | Stanmore Coal Ltd | 0.38 | 1.59 | 1.25 |
| TER.AX | Terracom Ltd | 0.09 | 1.69 | 1.59 |
| WEC.AX | White Energy Company Ltd | 2.97 | -0.17 | -0.06 |
| Low | High | |
| Unlevered beta | 1.06 | 1.27 |
| Relevered beta | 1.39 | 1.66 |
| Adjusted relevered beta | 1.26 | 1.44 |
WHC.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 WHC.AX:
cost_of_equity (12.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.26) + 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.