CNU.NZ WACC - Weighted Average Cost of Capital
The WACC of Chorus Ltd (CNU.NZ) is 6.5%.
| Range | Selected | |
| Cost of equity | 8.1% - 10.4% | 9.25% |
| Tax rate | 32.3% - 36.7% | 34.5% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.4% - 7.5% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.73 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 10.4% |
| Tax rate | 32.3% | 36.7% |
| Debt/Equity ratio | 0.96 | 0.96 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.4% | 7.5% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CNU.NZ | Chorus Ltd | 0.96 | 0.77 | 0.47 |
| 1883.HK | CITIC Telecom International Holdings Ltd | 0.5 | 0.5 | 0.38 |
| 3843.T | FreeBit Co Ltd | 0.5 | 1.03 | 0.78 |
| 4423.T | Arteria Networks Corp | 0.53 | 0.77 | 0.57 |
| 600804.SS | Dr.Peng Telecom & Media Group Co Ltd | 4.14 | 0.21 | 0.06 |
| CJLU.SI | NetLink NBN Trust | 0.24 | 0.25 | 0.22 |
| DNET.JK | Indoritel Makmur Internasional Tbk PT | 0.05 | 0.48 | 0.46 |
| LINK.JK | Link Net Tbk PT | 1.53 | 0.17 | 0.08 |
| TIMECOM.KL | TIME dotCom Bhd | 0.01 | 0.36 | 0.36 |
| UWL.AX | Uniti Group Ltd | 0.08 | 1.49 | 1.42 |
| Low | High | |
| Unlevered beta | 0.37 | 0.47 |
| Relevered beta | 0.6 | 0.76 |
| Adjusted relevered beta | 0.73 | 0.84 |
CNU.NZ'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 CNU.NZ:
cost_of_equity (9.25%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.73) + 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.