AEI.AX
Aeris Environmental Ltd
Price:  
0.05 
AUD
Volume:  
6,669.00
Australia | Commercial Services & Supplies
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AEI.AX WACC - Weighted Average Cost of Capital

The WACC of Aeris Environmental Ltd (AEI.AX) is 7.0%.

The Cost of Equity of Aeris Environmental Ltd (AEI.AX) is 7.20%.
The Cost of Debt of Aeris Environmental Ltd (AEI.AX) is 4.60%.

Range Selected
Cost of equity 6.30% - 8.10% 7.20%
Tax rate 4.10% - 6.30% 5.20%
Cost of debt 4.60% - 4.60% 4.60%
WACC 6.2% - 7.8% 7.0%
WACC

AEI.AX WACC calculation

Category Low High
Long-term bond rate 4.0% 4.5%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.44 0.5
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.30% 8.10%
Tax rate 4.10% 6.30%
Debt/Equity ratio 0.07 0.07
Cost of debt 4.60% 4.60%
After-tax WACC 6.2% 7.8%
Selected WACC 7.0%

AEI.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 AEI.AX:

cost_of_equity (7.20%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.