ASH.AX WACC - Weighted Average Cost of Capital

The WACC of Ashley Services Group Ltd (ASH.AX) is 5.8%.

The Cost of Equity of Ashley Services Group Ltd (ASH.AX) is 6.90%.

The Cost of Debt of Ashley Services Group Ltd (ASH.AX) is 5.50%.

	Range	Selected
Cost of equity	6.00% - 7.80%	6.90%
Tax rate	28.50% - 29.40%	28.95%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.8% - 6.8%	5.8%

WACC

ASH.AX WACC calculation

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	6.00%	7.80%

Tax rate	28.50%	29.40%
Debt/Equity ratio	0.59	0.59
Cost of debt	4.00%	7.00%

After-tax WACC	4.8%	6.8%


Selected WACC	5.8%

ASH.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 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.