CCP.AX WACC - Weighted Average Cost of Capital

The WACC of Credit Corp Group Ltd (CCP.AX) is 9.4%.

The Cost of Equity of Credit Corp Group Ltd (CCP.AX) is 11.50%.

The Cost of Debt of Credit Corp Group Ltd (CCP.AX) is 5.50%.

	Range	Selected
Cost of equity	10.10% - 12.90%	11.50%
Tax rate	29.60% - 29.80%	29.70%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.1% - 10.7%	9.4%

WACC

CCP.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.19	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.90%

Tax rate	29.60%	29.80%
Debt/Equity ratio	0.38	0.38
Cost of debt	4.00%	7.00%

After-tax WACC	8.1%	10.7%


Selected WACC	9.4%

CCP.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 CCP.AX:

cost_of_equity (11.50%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.19) + 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.