GOZ.AX WACC - Weighted Average Cost of Capital
The WACC of Growthpoint Properties Australia Ltd (GOZ.AX) is 7.1%.
| Range | Selected | |
| Cost of equity | 7.4% - 10.4% | 8.9% |
| Tax rate | 1.6% - 1.8% | 1.7% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.6% - 8.5% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.66 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 10.4% |
| Tax rate | 1.6% | 1.8% |
| Debt/Equity ratio | 1.1 | 1.1 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.6% | 8.5% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GOZ.AX | Growthpoint Properties Australia Ltd | 1.1 | 0.75 | 0.36 |
| 3295.T | Hulic Reit Inc | 0.87 | 0.19 | 0.1 |
| 3296.T | Nippon REIT Investment Corp | 0.87 | 0.27 | 0.15 |
| 8956.T | Premier Investment Corp | 0.77 | 0.26 | 0.15 |
| ABP.AX | Abacus Property Group | 0.96 | 0.86 | 0.44 |
| CLW.AX | Charter Hall Long WALE REIT | 0.61 | 0.92 | 0.58 |
| GPT.AX | GPT Group | 0.53 | 0.69 | 0.46 |
| MGR.AX | Mirvac Group | 0.5 | 0.98 | 0.66 |
| SCP.AX | Shopping Centres Australasia Property Group Re Ltd | 0.5 | 0.68 | 0.46 |
| WOT.AX | WOTSO Property | 1.3 | 0.33 | 0.15 |
| Low | High | |
| Unlevered beta | 0.27 | 0.45 |
| Relevered beta | 0.49 | 0.82 |
| Adjusted relevered beta | 0.66 | 0.88 |
GOZ.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 GOZ.AX:
cost_of_equity (8.90%) = 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.