The WACC of Eclipx Group Ltd (ECX.AX) is 6.0%.
Range | Selected | |
Cost of equity | 6.9% - 12.8% | 9.85% |
Tax rate | 29.2% - 29.5% | 29.35% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.9% - 7.2% | 6.0% |
Category | Low | High |
Long-term bond rate | 4.1% | 4.6% |
Equity market risk premium | 5.5% | 6.5% |
Adjusted beta | 0.51 | 1.18 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.9% | 12.8% |
Tax rate | 29.2% | 29.5% |
Debt/Equity ratio | 1.53 | 1.53 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.9% | 7.2% |
Selected WACC | 6.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ECX.AX | Eclipx Group Ltd | 1.53 | 1.73 | 0.83 |
8508.T | J Trust Co Ltd | 1.31 | 1.09 | 0.57 |
ADMF.JK | Adira Dinamika Multi Finance Tbk PT | 1.97 | 0.25 | 0.1 |
BFIN.JK | BFI Finance Indonesia Tbk PT | 1.09 | 1.08 | 0.61 |
FSA.AX | FSA Group Ltd | 4.63 | 0.45 | 0.1 |
HUM.AX | Humm Group Ltd | 16.24 | 1.15 | 0.09 |
MNY.AX | Money3 Corp Ltd | 1.42 | 2.08 | 1.04 |
PGL.AX | Prospa Group Ltd | 10.73 | -0.93 | -0.11 |
PLT.AX | Plenti Group Ltd | 15.79 | 0.4 | 0.03 |
WZR.AX | WISR Ltd | 22.59 | 0.4 | 0.02 |
Low | High | |
Unlevered beta | 0.1 | 0.29 |
Relevered beta | 0.27 | 1.27 |
Adjusted relevered beta | 0.51 | 1.18 |
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 ECX.AX:
cost_of_equity (9.85%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (0.51) + 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.