YAL.AX WACC - Weighted Average Cost of Capital
The WACC of Yancoal Australia Ltd (YAL.AX) is 11.0%.
| Range | Selected | |
| Cost of equity | 9.6% - 12.6% | 11.1% |
| Tax rate | 28.2% - 28.8% | 28.5% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 9.5% - 12.5% | 11.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.1 | 1.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.6% | 12.6% |
| Tax rate | 28.2% | 28.8% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 9.5% | 12.5% |
| Selected WACC | 11.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| YAL.AX | Yancoal Australia Ltd | 0.01 | 0.65 | 0.64 |
| AGE.AX | Alligator Energy Ltd | 0 | 1.89 | 1.88 |
| DEV.AX | DevEx Resources Ltd | 0.01 | 1.74 | 1.73 |
| ERA.AX | Energy Resources Of Australia Ltd | 0 | 1.87 | 1.87 |
| NHC.AX | New Hope Corporation Ltd | 0.11 | 0.92 | 0.85 |
| PEN.AX | Peninsula Energy Ltd | 0 | 1.3 | 1.3 |
| SMR.AX | Stanmore Coal Ltd | 0.39 | 1.58 | 1.23 |
| SOL.AX | Washington H Soul Pattinson and Company Ltd | 0.05 | 0.63 | 0.6 |
| TER.AX | Terracom Ltd | 0.07 | 1.5 | 1.43 |
| WHC.AX | Whitehaven Coal Ltd | 0.41 | 1.27 | 0.98 |
| Low | High | |
| Unlevered beta | 1.13 | 1.35 |
| Relevered beta | 1.15 | 1.36 |
| Adjusted relevered beta | 1.1 | 1.24 |
YAL.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 YAL.AX:
cost_of_equity (11.10%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.1) + 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.