D2O.AX WACC - Weighted Average Cost of Capital
The WACC of Duxton Water Ltd (D2O.AX) is 5.8%.
| Range | Selected | |
| Cost of equity | 5.9% - 7.5% | 6.7% |
| Tax rate | 29.8% - 30.0% | 29.9% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.9% - 6.6% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.36 | 0.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.9% | 7.5% |
| Tax rate | 29.8% | 30.0% |
| Debt/Equity ratio | 0.48 | 0.48 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.9% | 6.6% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| D2O.AX | Duxton Water Ltd | 0.48 | -0.04 | -0.03 |
| 1026.HK | Universal Technologies Holdings Ltd | 1.14 | 0.09 | 0.05 |
| 1542.HK | Taizhou Water Group Co Ltd | 54.64 | 0.16 | 0 |
| CLW.VN | Cho Lon Water Supply JSC | 0.17 | -0.4 | -0.35 |
| DEM.AX | De.mem Ltd | 0.04 | 1.72 | 1.67 |
| KGKC.ME | Kurganskaya Generiruyushchaya Kompaniya PAO | 0.29 | 0.13 | 0.11 |
| PBA.KL | Pba Holdings Bhd | 0.35 | 2.08 | 1.67 |
| PO3.AX | Purifloh Ltd | 0.17 | 1.12 | 1.01 |
| TDW.VN | Thu Duc Water Supply JSC | 0.09 | -0.04 | -0.04 |
| U9E.SI | China Everbright Water Ltd | 4 | 0.22 | 0.06 |
| Low | High | |
| Unlevered beta | 0.03 | 0.08 |
| Relevered beta | 0.04 | 0.1 |
| Adjusted relevered beta | 0.36 | 0.4 |
D2O.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 D2O.AX:
cost_of_equity (6.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.