AR9.AX WACC - Weighted Average Cost of Capital
The WACC of Archtis Ltd (AR9.AX) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.7% - 8.9% | 7.3% |
| Tax rate | 2.9% - 5.2% | 4.05% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 5.6% - 8.7% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 8.9% |
| Tax rate | 2.9% | 5.2% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 5.6% | 8.7% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AR9.AX | Archtis Ltd | 0.06 | 0.01 | 0.01 |
| AND.AX | Ansarada Group Ltd | 0.02 | 0.42 | 0.41 |
| CAG.AX | Cape Range Ltd | 0 | -0.67 | -0.67 |
| CPT.AX | Cipherpoint Ltd | 0.07 | 0.92 | 0.87 |
| DTS.AX | Dragontail Systems Ltd | 0.1 | -0.95 | -0.87 |
| FZO.AX | Family Zone Cyber Safety Ltd | 0.08 | 1.51 | 1.4 |
| HSC.AX | HSC Technology Group Ltd | 0.22 | 0.57 | 0.47 |
| IOD.AX | Iodm Ltd | 0.01 | -0.54 | -0.54 |
| K2F.AX | K2FLY Ltd | 0 | 0.91 | 0.9 |
| PRO.AX | Prophecy International Holdings Ltd | 0.03 | -0.02 | -0.02 |
| Low | High | |
| Unlevered beta | 0 | 0.43 |
| Relevered beta | 0 | 0.46 |
| Adjusted relevered beta | 0.33 | 0.64 |
AR9.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 AR9.AX:
cost_of_equity (7.30%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.