AFH.WA WACC - Weighted Average Cost of Capital

The WACC of Aforti Holding SA (AFH.WA) is 7.4%.

The Cost of Equity of Aforti Holding SA (AFH.WA) is 12.30%.

The Cost of Debt of Aforti Holding SA (AFH.WA) is 7.00%.

	Range	Selected
Cost of equity	9.30% - 15.30%	12.30%
Tax rate	0.70% - 1.40%	1.05%
Cost of debt	7.00% - 7.00%	7.00%
WACC	7.1% - 7.6%	7.4%

WACC

AFH.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.6	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	15.30%

Tax rate	0.70%	1.40%
Debt/Equity ratio	11.01	11.01
Cost of debt	7.00%	7.00%

After-tax WACC	7.1%	7.6%


Selected WACC	7.4%

AFH.WA'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 AFH.WA:

cost_of_equity (12.30%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.6) + 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.