FCT.AX WACC - Weighted Average Cost of Capital
The WACC of Firstwave Cloud Technology Ltd (FCT.AX) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.0% | 7.85% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.6% - 4.6% | 4.6% |
| WACC | 6.5% - 8.7% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.53 | 0.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.0% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 4.6% | 4.6% |
| After-tax WACC | 6.5% | 8.7% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FCT.AX | Firstwave Cloud Technology Ltd | 0.07 | 1.82 | 1.73 |
| 2351.T | ASJ Inc | 0.09 | 0.55 | 0.52 |
| 250.HK | Sino-I Technology Ltd | 0.37 | 0.31 | 0.25 |
| 3908.T | Collabos Corp | 0.2 | 0.53 | 0.46 |
| 7078.T | INCLUSIVE Inc | 0.16 | 0.92 | 0.83 |
| 7093.T | Adish Co Ltd | 0.45 | -0.31 | -0.23 |
| CCG.AX | Comms Group Ltd | 0.38 | 1.91 | 1.51 |
| CGO.AX | CPT Global Ltd | 0.07 | -0.88 | -0.84 |
| SOV.AX | Sovereign Cloud Holdings Ltd | 0.15 | -0.97 | -0.88 |
| VOR.AX | Vortiv Ltd | 5.22 | 1.45 | 0.31 |
| Low | High | |
| Unlevered beta | 0.29 | 0.48 |
| Relevered beta | 0.3 | 0.49 |
| Adjusted relevered beta | 0.53 | 0.66 |
FCT.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 FCT.AX:
cost_of_equity (7.85%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.