8CO.AX WACC - Weighted Average Cost of Capital
The WACC of 8Common Ltd (8CO.AX) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.2% - 10.9% | 8.05% |
| Tax rate | 2.3% - 3.8% | 3.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.1% - 7.8% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.24 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 10.9% |
| Tax rate | 2.3% | 3.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.1% | 7.8% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8CO.AX | 8Common Ltd | 0.89 | 0.8 | 0.43 |
| AV1.AX | Adveritas Ltd | 0.05 | 1.05 | 1.01 |
| HSC.AX | HSC Technology Group Ltd | 0.22 | 0.57 | 0.47 |
| JXT.AX | Jaxsta Ltd | 0.08 | 0.51 | 0.47 |
| KNO.AX | Knosys Ltd | 0.03 | -0.68 | -0.67 |
| OLL.AX | Openlearning Ltd | 0.36 | -0.39 | -0.29 |
| PTG.AX | Proptech Group Ltd | 0.01 | 1.46 | 1.45 |
| RCL.AX | ReadCloud Ltd | 0.01 | 0.8 | 0.8 |
| SIS.AX | Simble Solutions Ltd | 0.09 | -1.02 | -0.93 |
| TYM.AX | TYMLEZ Group Ltd | 0.1 | -1.73 | -1.58 |
| XPE.AX | XPED Ltd | 0.03 | 0.07 | 0.07 |
| Low | High | |
| Unlevered beta | 0.07 | 0.47 |
| Relevered beta | -0.13 | 0.94 |
| Adjusted relevered beta | 0.24 | 0.96 |
8CO.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 8CO.AX:
cost_of_equity (8.05%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.24) + 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.