GFL.AX WACC - Weighted Average Cost of Capital
The WACC of Global Masters Fund Ltd (GFL.AX) is 7.8%.
| Range | Selected | |
| Cost of equity | 7.4% - 9.5% | 8.45% |
| Tax rate | 32.9% - 45.0% | 38.95% |
| Cost of debt | 7.6% - 7.6% | 7.6% |
| WACC | 7.0% - 8.5% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.66 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 9.5% |
| Tax rate | 32.9% | 45.0% |
| Debt/Equity ratio | 0.22 | 0.22 |
| Cost of debt | 7.6% | 7.6% |
| After-tax WACC | 7.0% | 8.5% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GFL.AX | Global Masters Fund Ltd | 0.22 | 0.58 | 0.51 |
| AIQ.AX | Alternative Investment Trust | 0.01 | 0.15 | 0.15 |
| ECP.AX | ECP Emerging Growth Ltd | 0.42 | 0.87 | 0.68 |
| FPC.AX | Fat Prophets Global Contrarian Fund Ltd | 0.83 | 0.25 | 0.16 |
| FSI.AX | Flagship Investments Ltd | 0.37 | 0.87 | 0.7 |
| NAC.AX | NAOS Ex-50 Opportunities Company Ltd | 0.72 | 0.8 | 0.54 |
| NCC.AX | NAOS Emerging Opportunities Company Ltd | 1.1 | 0.64 | 0.37 |
| Low | High | |
| Unlevered beta | 0.42 | 0.53 |
| Relevered beta | 0.49 | 0.61 |
| Adjusted relevered beta | 0.66 | 0.74 |
GFL.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 GFL.AX:
cost_of_equity (8.45%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.