ARH.WA WACC - Weighted Average Cost of Capital

The WACC of Archicom SA (ARH.WA) is 9.8%.

The Cost of Equity of Archicom SA (ARH.WA) is 10.25%.

The Cost of Debt of Archicom SA (ARH.WA) is 10.70%.

	Range	Selected
Cost of equity	9.10% - 11.40%	10.25%
Tax rate	21.70% - 22.80%	22.25%
Cost of debt	10.70% - 10.70%	10.70%
WACC	8.9% - 10.6%	9.8%

WACC

ARH.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.57	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	11.40%

Tax rate	21.70%	22.80%
Debt/Equity ratio	0.31	0.31
Cost of debt	10.70%	10.70%

After-tax WACC	8.9%	10.6%


Selected WACC	9.8%

ARH.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 ARH.WA:

cost_of_equity (10.25%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.57) + 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.