AST.AX WACC - Weighted Average Cost of Capital

The WACC of AusNet Services Ltd (AST.AX) is 6.9%.

The Cost of Equity of AusNet Services Ltd (AST.AX) is 10.05%.

The Cost of Debt of AusNet Services Ltd (AST.AX) is 5.00%.

	Range	Selected
Cost of equity	8.60% - 11.50%	10.05%
Tax rate	29.90% - 30.00%	29.95%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.1% - 7.6%	6.9%

WACC

AST.AX WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	4.7%	5.7%
Adjusted beta	1.03	1.19

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	11.50%

Tax rate	29.90%	30.00%
Debt/Equity ratio	0.94	0.94
Cost of debt	5.00%	5.00%

After-tax WACC	6.1%	7.6%


Selected WACC	6.9%

AST.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 AST.AX:

cost_of_equity (10.05%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (1.03) + 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.