AER.AX WACC - Weighted Average Cost of Capital
The WACC of Aeeris Ltd (AER.AX) is 6.7%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.6% | 9.85% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 7.6% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.81 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.6% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 7.6% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AER.AX | Aeeris Ltd | 0.95 | 0.42 | 0.25 |
| 1736.HK | China Parenting Network Holdings Ltd | 1.66 | 0.73 | 0.34 |
| 2978.T | Tsukuruba Inc | 0.3 | 0.26 | 0.22 |
| 4387.T | ZUU Co Ltd | 0.08 | 0.5 | 0.47 |
| AD1.AX | AD1 Holdings Ltd | 0.54 | 0.94 | 0.68 |
| CAR.AX | Carsales.Com Ltd | 0.09 | 1.16 | 1.09 |
| DHG.AX | Domain Holdings Australia Ltd | 0.07 | -0.46 | -0.44 |
| HPG.AX | Hipages Group Holdings Ltd | 0.08 | 0.68 | 0.64 |
| REA.AX | REA Group Ltd | 0.01 | 0.94 | 0.93 |
| RNT.AX | Rent.com.au Ltd | 0.01 | 0.32 | 0.32 |
| SEK.AX | Seek Ltd | 0.16 | 1.26 | 1.13 |
| Low | High | |
| Unlevered beta | 0.34 | 0.64 |
| Relevered beta | 0.72 | 1.12 |
| Adjusted relevered beta | 0.81 | 1.08 |
AER.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 AER.AX:
cost_of_equity (9.85%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.81) + 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.