AX1.AX WACC - Weighted Average Cost of Capital

The WACC of Accent Group Ltd (AX1.AX) is 7.7%.

The Cost of Equity of Accent Group Ltd (AX1.AX) is 12.40%.

The Cost of Debt of Accent Group Ltd (AX1.AX) is 5.50%.

	Range	Selected
Cost of equity	10.20% - 14.60%	12.40%
Tax rate	29.60% - 30.10%	29.85%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.1% - 9.2%	7.7%

WACC

AX1.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.21	1.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	14.60%

Tax rate	29.60%	30.10%
Debt/Equity ratio	1.25	1.25
Cost of debt	4.00%	7.00%

After-tax WACC	6.1%	9.2%


Selected WACC	7.7%

AX1.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 AX1.AX:

cost_of_equity (12.40%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.21) + 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.