GVF.AX WACC - Weighted Average Cost of Capital
The WACC of Global Value Fund Ltd (GVF.AX) is 7.7%.
| Range | Selected | |
| Cost of equity | 9.0% - 11.7% | 10.35% |
| Tax rate | 28.5% - 29.4% | 28.95% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 7.0% - 8.3% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.98 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.0% | 11.7% |
| Tax rate | 28.5% | 29.4% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 7.0% | 8.3% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GVF.AX | Global Value Fund Ltd | 0.9 | 0.3 | 0.18 |
| CAM.AX | Clime Capital Ltd | 0.32 | 0.63 | 0.52 |
| CDM.AX | Cadence Capital Ltd | 0.27 | 0.9 | 0.76 |
| FSI.AX | Flagship Investments Ltd | 0.39 | 0.87 | 0.68 |
| NCC.AX | NAOS Emerging Opportunities Company Ltd | 1.06 | 0.64 | 0.37 |
| NSC.AX | NAOS Small Cap Opportunities Company Ltd | 0.77 | 0.98 | 0.64 |
| PE1.AX | Pengana Private Equity Trust | 0.07 | 0.18 | 0.18 |
| SNC.AX | Sandon Capital Investments Ltd | 0.24 | 0.99 | 0.85 |
| Low | High | |
| Unlevered beta | 0.49 | 0.65 |
| Relevered beta | 0.97 | 1.13 |
| Adjusted relevered beta | 0.98 | 1.09 |
GVF.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 GVF.AX:
cost_of_equity (10.35%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.98) + 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.