8VI.AX WACC - Weighted Average Cost of Capital

The WACC of 8VI Holdings Ltd (8VI.AX) is 7.5%.

The Cost of Equity of 8VI Holdings Ltd (8VI.AX) is 14.10%.

The Cost of Debt of 8VI Holdings Ltd (8VI.AX) is 4.90%.

	Range	Selected
Cost of equity	10.30% - 17.90%	14.10%
Tax rate	12.20% - 13.60%	12.90%
Cost of debt	4.60% - 5.20%	4.90%
WACC	6.1% - 8.9%	7.5%

WACC

8VI.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.23	2.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	17.90%

Tax rate	12.20%	13.60%
Debt/Equity ratio	2.06	2.06
Cost of debt	4.60%	5.20%

After-tax WACC	6.1%	8.9%


Selected WACC	7.5%

8VI.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 8VI.AX:

cost_of_equity (14.10%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.23) + 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.