GFL.NZ WACC - Weighted Average Cost of Capital
The WACC of Geneva Finance Ltd (GFL.NZ) is 5.0%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.0% | 8.65% |
| Tax rate | 17.0% - 27.2% | 22.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.0% - 5.9% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.59 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.0% |
| Tax rate | 17.0% | 27.2% |
| Debt/Equity ratio | 4.85 | 4.85 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.0% | 5.9% |
| Selected WACC | 5.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GFL.NZ | Geneva Finance Ltd | 4.85 | 0.59 | 0.13 |
| 532745.BO | Inditrade Capital Ltd | 10.4 | 0.65 | 0.08 |
| 8030.HK | Flying Financial Service Holdings Ltd | 0 | -0.31 | -0.31 |
| 8325.HK | China Smartpay Group Holdings Ltd | 2.47 | -0.17 | -0.06 |
| CAPTRUST.NS | Capital Trust Ltd | 0.49 | 1.46 | 1.08 |
| ECL.BK | Eastern Commercial Leasing PCL | 2.15 | 1.67 | 0.65 |
| HDFA.JK | Radana Bhaskara Finance Tbk PT | 3.5 | 0.57 | 0.16 |
| JOHAN.KL | Johan Holdings Bhd | 0.12 | -1.17 | -1.08 |
| TIFA.JK | KDB Tifa Finance Tbk PT | 0.31 | 0.46 | 0.37 |
| VRNA.JK | Verena Multi Finance Tbk PT | 5.64 | 0.46 | 0.09 |
| Low | High | |
| Unlevered beta | 0.08 | 0.14 |
| Relevered beta | 0.39 | 0.64 |
| Adjusted relevered beta | 0.59 | 0.76 |
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 (8.65%) = 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.