IPH.AX WACC - Weighted Average Cost of Capital
The WACC of IPH Ltd (IPH.AX) is 7.5%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.1% | 8.7% |
| Tax rate | 24.9% - 25.9% | 25.4% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.1% - 8.8% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.63 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.1% |
| Tax rate | 24.9% | 25.9% |
| Debt/Equity ratio | 0.35 | 0.35 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.1% | 8.8% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IPH.AX | IPH Ltd | 0.35 | 0.53 | 0.42 |
| 9757.T | Funai Soken Holdings Inc | 0 | 0.58 | 0.58 |
| ALQ.AX | ALS Ltd | 0.22 | 0.95 | 0.82 |
| AMX.AX | Aerometrex Ltd | 0.79 | 0.43 | 0.27 |
| EAX.AX | Energy Action Ltd | 0.34 | -0.96 | -0.77 |
| KPG.AX | Kelly Partners Group Holdings Ltd | 0.15 | 0.66 | 0.59 |
| RITES.NS | RITES Ltd | 0 | 1.65 | 1.65 |
| SOP.AX | SML Corporation Ltd | 0.15 | -1.13 | -1.02 |
| VRS.AX | Veris Ltd | 0.89 | -1.03 | -0.62 |
| YPB.AX | YPB Group Ltd | 0.33 | 0.82 | 0.66 |
| Low | High | |
| Unlevered beta | 0.36 | 0.58 |
| Relevered beta | 0.45 | 0.73 |
| Adjusted relevered beta | 0.63 | 0.82 |
IPH.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 IPH.AX:
cost_of_equity (8.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.63) + 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.