ARV.NZ WACC - Weighted Average Cost of Capital
The WACC of Arvida Group Ltd (ARV.NZ) is 12.4%.
| Range | Selected | |
| Cost of equity | 8.2% - 11.2% | 9.7% |
| Tax rate | 1.6% - 2.8% | 2.2% |
| Cost of debt | 4.0% - 24.3% | 14.15% |
| WACC | 5.4% - 19.5% | 12.4% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.75 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 11.2% |
| Tax rate | 1.6% | 2.8% |
| Debt/Equity ratio | 1.97 | 1.97 |
| Cost of debt | 4.0% | 24.3% |
| After-tax WACC | 5.4% | 19.5% |
| Selected WACC | 12.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARV.NZ | Arvida Group Ltd | 1.97 | 0.86 | 0.29 |
| 2120.HK | Wenzhou Kangning Hospital Co Ltd | 1.97 | -0.08 | -0.03 |
| 9906.HK | Honliv Healthcare Management Group Co Ltd | 0.22 | 0.32 | 0.26 |
| OCA.NZ | Oceania Healthcare Ltd | 1.38 | 0.88 | 0.37 |
| PRINC.BK | Principal Capital PCL | 0.48 | 0.94 | 0.64 |
| PSQ.AX | Pacific Smiles Group Ltd | 0.26 | 0.16 | 0.13 |
| RYM.NZ | Ryman Healthcare Ltd | 1.03 | 1.98 | 0.98 |
| SKR.BK | Sikarin PCL | 0.06 | 0.15 | 0.14 |
| SRAJ.JK | Sejahteraraya Anugrahjaya Tbk PT | 0.05 | -0.87 | -0.83 |
| SUM.NZ | Summerset Group Holdings Ltd | 0.63 | 1.28 | 0.79 |
| Low | High | |
| Unlevered beta | 0.21 | 0.33 |
| Relevered beta | 0.63 | 0.96 |
| Adjusted relevered beta | 0.75 | 0.97 |
ARV.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 ARV.NZ:
cost_of_equity (9.70%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.