IOU.AX WACC - Weighted Average Cost of Capital
The WACC of Ioupay Ltd (IOU.AX) is 9.0%.
| Range | Selected | |
| Cost of equity | 7.7% - 10.6% | 9.15% |
| Tax rate | 1.3% - 4.3% | 2.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.6% - 10.4% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 4.1% | 4.6% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.71 | 0.89 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 10.6% |
| Tax rate | 1.3% | 4.3% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.6% | 10.4% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IOU.AX | Ioupay Ltd | 0.03 | 2.1 | 2.04 |
| 4387.T | ZUU Co Ltd | 0.08 | 0.5 | 0.47 |
| 4800.T | Oricon Inc | 0.02 | 0.38 | 0.37 |
| 6049.T | Itokuro Inc | 0 | 0.89 | 0.89 |
| 6552.T | GameWith Inc | 0.08 | 1.58 | 1.47 |
| CAR.AX | Carsales.Com Ltd | 0.09 | 1.16 | 1.06 |
| DHG.AX | Domain Holdings Australia Ltd | 0.07 | -0.46 | -0.43 |
| HPG.AX | Hipages Group Holdings Ltd | 0.08 | 0.68 | 0.63 |
| REA.AX | REA Group Ltd | 0.01 | 0.94 | 0.93 |
| SEK.AX | Seek Ltd | 0.16 | 1.26 | 1.09 |
| SPA.AX | Spacetalk Ltd | 0.45 | -48.67 | -33.85 |
| Low | High | |
| Unlevered beta | 0.63 | 0.93 |
| Relevered beta | 0.57 | 0.84 |
| Adjusted relevered beta | 0.71 | 0.89 |
IOU.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 IOU.AX:
cost_of_equity (9.15%) = risk_free_rate (4.35%) + equity_risk_premium (5.60%) * adjusted_beta (0.71) + 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.