ERG.WA WACC - Weighted Average Cost of Capital

The WACC of ERG SA (ERG.WA) is 9.2%.

The Cost of Equity of ERG SA (ERG.WA) is 9.90%.

The Cost of Debt of ERG SA (ERG.WA) is 6.95%.

	Range	Selected
Cost of equity	8.20% - 11.60%	9.90%
Tax rate	20.20% - 24.70%	22.45%
Cost of debt	6.90% - 7.00%	6.95%
WACC	7.8% - 10.6%	9.2%

WACC

ERG.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.42	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	11.60%

Tax rate	20.20%	24.70%
Debt/Equity ratio	0.19	0.19
Cost of debt	6.90%	7.00%

After-tax WACC	7.8%	10.6%


Selected WACC	9.2%

ERG.WA'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 ERG.WA:

cost_of_equity (9.90%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.42) + 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.