GOV.WA WACC - Weighted Average Cost of Capital

The WACC of Govena Lighting SA (GOV.WA) is 9.4%.

The Cost of Equity of Govena Lighting SA (GOV.WA) is 9.55%.

The Cost of Debt of Govena Lighting SA (GOV.WA) is 5.00%.

	Range	Selected
Cost of equity	8.40% - 10.70%	9.55%
Tax rate	4.60% - 5.00%	4.80%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.3% - 10.4%	9.4%

WACC

GOV.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.46	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	10.70%

Tax rate	4.60%	5.00%
Debt/Equity ratio	0.04	0.04
Cost of debt	5.00%	5.00%

After-tax WACC	8.3%	10.4%


Selected WACC	9.4%

GOV.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 GOV.WA:

cost_of_equity (9.55%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.46) + 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.