COB.AX WACC - Weighted Average Cost of Capital

The WACC of Cobalt Blue Holdings Ltd (COB.AX) is 7.4%.

The Cost of Equity of Cobalt Blue Holdings Ltd (COB.AX) is 7.90%.

The Cost of Debt of Cobalt Blue Holdings Ltd (COB.AX) is 4.30%.

	Range	Selected
Cost of equity	6.40% - 9.40%	7.90%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	4.00% - 4.60%	4.30%
WACC	6.0% - 8.7%	7.4%

WACC

COB.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.47	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	9.40%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.00%	4.60%

After-tax WACC	6.0%	8.7%


Selected WACC	7.4%

COB.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 COB.AX:

cost_of_equity (7.90%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.