EAS.AX WACC - Weighted Average Cost of Capital
The WACC of Easton Investments Ltd (EAS.AX) is 9.6%.
| Range | Selected | |
| Cost of equity | 8.5% - 10.8% | 9.65% |
| Tax rate | 26.7% - 27.4% | 27.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.5% - 10.7% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.02 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 10.8% |
| Tax rate | 26.7% | 27.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.5% | 10.7% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EAS.AX | Easton Investments Ltd | 0.01 | 0.68 | 0.67 |
| CAF.AX | Centrepoint Alliance Ltd | 0.08 | 0.08 | 0.08 |
| CIW.AX | Clime Investment Management Ltd | 0.02 | 0.13 | 0.12 |
| DCL.AX | Domacom Australia Ltd | 0.71 | 3.8 | 2.5 |
| FID.AX | Fiducian Group Ltd | 0.01 | 0.41 | 0.41 |
| KAM.AX | K2 Asset Management Holdings Ltd | 0 | 1.36 | 1.36 |
| MAI.AX | Mainstream Group Holdings Ltd | 0.03 | 1.79 | 1.75 |
| PCG.AX | Pengana Capital Group Ltd | 0.11 | 1.22 | 1.13 |
| PFG.AX | Prime Financial Group Ltd | 0.25 | 0.41 | 0.35 |
| TIP.AX | Teaminvest Private Group Ltd | 0.44 | -0.34 | -0.26 |
| Low | High | |
| Unlevered beta | 0.38 | 0.86 |
| Relevered beta | 1.03 | 1.09 |
| Adjusted relevered beta | 1.02 | 1.06 |
EAS.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 EAS.AX:
cost_of_equity (9.65%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (1.02) + 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.