GFL.NZ
Geneva Finance Ltd
Price:  
0.30 
NZD
Volume:  
85,034.00
New Zealand | Consumer Finance
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GFL.NZ WACC - Weighted Average Cost of Capital

The WACC of Geneva Finance Ltd (GFL.NZ) is 5.0%.

The Cost of Equity of Geneva Finance Ltd (GFL.NZ) is 8.60%.
The Cost of Debt of Geneva Finance Ltd (GFL.NZ) is 5.50%.

Range Selected
Cost of equity 7.30% - 9.90% 8.60%
Tax rate 17.00% - 27.20% 22.10%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.0% - 5.9% 5.0%
WACC

GFL.NZ WACC calculation

Category Low High
Long-term bond rate 4.3% 4.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.59 0.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 9.90%
Tax rate 17.00% 27.20%
Debt/Equity ratio 4.85 4.85
Cost of debt 4.00% 7.00%
After-tax WACC 4.0% 5.9%
Selected WACC 5.0%

GFL.NZ'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.NZ:

cost_of_equity (8.60%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.59) + 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.