The WACC of Ashley Services Group Ltd (ASH.AX) is 5.8%.
Range | Selected | |
Cost of equity | 6.0% - 7.8% | 6.9% |
Tax rate | 28.5% - 29.4% | 28.95% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.8% - 6.8% | 5.8% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.38 | 0.46 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 7.8% |
Tax rate | 28.5% | 29.4% |
Debt/Equity ratio | 0.59 | 0.59 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.8% | 6.8% |
Selected WACC | 5.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ASH.AX | Ashley Services Group Ltd | 0.59 | -0.81 | -0.57 |
3130.TW | 104 Corp | 0.02 | 0.11 | 0.11 |
6198.T | Career Co Ltd | 0.28 | 0.38 | 0.32 |
7041.T | CRG Holdings Co Ltd | 5.32 | 0.13 | 0.03 |
7781.T | Hirayama Holdings Co Ltd | 0.21 | 0.86 | 0.75 |
8293.HK | Singasia Holdings Ltd | 1.59 | 0.58 | 0.27 |
AGL.NZ | Accordant Group Ltd | 2.9 | 0.24 | 0.08 |
FLN.AX | Freelancer Ltd | 0.13 | 0.2 | 0.18 |
HIT.AX | Hitech Group Australia Ltd | 0.02 | -0.09 | -0.09 |
IGN.AX | Ignite Ltd | 0.03 | -1.48 | -1.45 |
Low | High | |
Unlevered beta | 0.06 | 0.14 |
Relevered beta | 0.07 | 0.19 |
Adjusted relevered beta | 0.38 | 0.46 |
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 ASH.AX:
cost_of_equity (6.90%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + 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.