DEM.AX WACC - Weighted Average Cost of Capital
The WACC of De.mem Ltd (DEM.AX) is 7.8%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.7% | 7.7% |
| Tax rate | 0.8% - 1.2% | 1% |
| Cost of debt | 7.0% - 10.9% | 8.95% |
| WACC | 5.8% - 9.7% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.33 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.7% |
| Tax rate | 0.8% | 1.2% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 7.0% | 10.9% |
| After-tax WACC | 5.8% | 9.7% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DEM.AX | De.mem Ltd | 0.04 | 1.75 | 1.68 |
| 1395.HK | ELL Environmental Holdings Ltd | 1.2 | 1.31 | 0.6 |
| 1542.HK | Taizhou Water Group Co Ltd | 55.41 | 0.26 | 0 |
| 600187.SS | Heilongjiang Interchina Water Treatment Co Ltd | 0.01 | -0.08 | -0.08 |
| BHK.SI | SIIC Environment Holdings Ltd | 9.91 | 0.08 | 0.01 |
| BTW.VN | Ben Thanh Water Supply JSC | 0.03 | 0.68 | 0.66 |
| CLW.VN | Cho Lon Water Supply JSC | 0.17 | -0.29 | -0.24 |
| D2O.AX | Duxton Water Ltd | 0.49 | -0.04 | -0.03 |
| PO3.AX | Purifloh Ltd | 0.17 | 1.12 | 0.96 |
| SII.VN | Sai Gon Water Infrastructure Corp | 0.75 | 1.65 | 0.95 |
| Low | High | |
| Unlevered beta | 0.01 | 0.62 |
| Relevered beta | 0 | 0.64 |
| Adjusted relevered beta | 0.33 | 0.76 |
DEM.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 DEM.AX:
cost_of_equity (7.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.