BRI.AX WACC - Weighted Average Cost of Capital
The WACC of Big River Industries Ltd (BRI.AX) is 6.0%.
| Range | Selected | |
| Cost of equity | 6.9% - 8.6% | 7.75% |
| Tax rate | 29.9% - 31.0% | 30.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.5% - 6.5% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.56 | 0.59 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 8.6% |
| Tax rate | 29.9% | 31.0% |
| Debt/Equity ratio | 0.72 | 0.72 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.5% | 6.5% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BRI.AX | Big River Industries Ltd | 0.72 | 0.35 | 0.23 |
| 000180.KS | Sungchang Enterprise Holdings Ltd | 0.47 | 0.27 | 0.2 |
| 008250.KS | Eagon Industrial Co Ltd | 2.46 | 0.51 | 0.19 |
| 025750.KS | Hansol HomeDeco Co Ltd | 1.97 | 0.53 | 0.22 |
| 7808.T | C.S. Lumber Co Inc | 1.61 | 0.5 | 0.24 |
| 7887.T | Nankai Plywood Co Ltd | 0.86 | 0.31 | 0.19 |
| 7897.T | Hokushin Co Ltd | 1.46 | 0.59 | 0.29 |
| EVERGRN.KL | Evergreen Fibreboard Bhd | 1.38 | 1.67 | 0.85 |
| GREENPLY.NS | Greenply Industries Ltd | 0.17 | 1.38 | 1.24 |
| MWY.AX | Midway Ltd | 0.22 | 0.44 | 0.38 |
| Low | High | |
| Unlevered beta | 0.23 | 0.26 |
| Relevered beta | 0.34 | 0.39 |
| Adjusted relevered beta | 0.56 | 0.59 |
BRI.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 BRI.AX:
cost_of_equity (7.75%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.