ASB.AX WACC - Weighted Average Cost of Capital
The WACC of Austal Ltd (ASB.AX) is 8.9%.
| Range | Selected | |
| Cost of equity | 7.7% - 11.4% | 9.55% |
| Tax rate | 26.5% - 28.5% | 27.5% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 7.2% - 10.7% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.72 | 1.05 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 11.4% |
| Tax rate | 26.5% | 28.5% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 7.2% | 10.7% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ASB.AX | Austal Ltd | 0.13 | 1.05 | 0.96 |
| 079550.KS | LIG Nex1 Co Ltd | 0.05 | 1.19 | 1.15 |
| 2634.TW | Aerospace Industrial Development Corp | 0.47 | 0.53 | 0.4 |
| 7408.T | Jamco Corp | 1.13 | 0.38 | 0.21 |
| EOS.AX | Electro Optic Systems Holdings Ltd | 0.3 | 1.7 | 1.4 |
| MAZDOCK.NS | Mazagon Dock Shipbuilders Ltd | 0 | 1.8 | 1.8 |
| OEC.AX | Orbital Corporation Ltd | 0.41 | 0.34 | 0.26 |
| QHL.AX | Quickstep Holdings Ltd | 0.63 | 0.92 | 0.63 |
| RKKE.ME | RKK Energiya im. S.P. Koroleva PAO | 0.5 | 0.21 | 0.16 |
| UUV.AX | UUV Aquabotix Ltd | 0.1 | 1.1 | 1.03 |
| Low | High | |
| Unlevered beta | 0.54 | 0.99 |
| Relevered beta | 0.58 | 1.07 |
| Adjusted relevered beta | 0.72 | 1.05 |
ASB.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 ASB.AX:
cost_of_equity (9.55%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.72) + 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.