AFT.NZ
AFT Pharmaceuticals Ltd
Price:  
2.66 
NZD
Volume:  
18,014.00
New Zealand | Pharmaceuticals
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AFT.NZ WACC - Weighted Average Cost of Capital

The WACC of AFT Pharmaceuticals Ltd (AFT.NZ) is 7.9%.

The Cost of Equity of AFT Pharmaceuticals Ltd (AFT.NZ) is 8.50%.
The Cost of Debt of AFT Pharmaceuticals Ltd (AFT.NZ) is 5.00%.

Range Selected
Cost of equity 6.70% - 10.30% 8.50%
Tax rate 19.80% - 29.00% 24.40%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.3% - 9.4% 7.9%
WACC

AFT.NZ WACC calculation

Category Low High
Long-term bond rate 4.3% 4.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.46 0.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 10.30%
Tax rate 19.80% 29.00%
Debt/Equity ratio 0.14 0.14
Cost of debt 5.00% 5.00%
After-tax WACC 6.3% 9.4%
Selected WACC 7.9%

AFT.NZ'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 AFT.NZ:

cost_of_equity (8.50%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.46) + 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.