KAM.AX WACC - Weighted Average Cost of Capital
The WACC of K2 Asset Management Holdings Ltd (KAM.AX) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.2% - 8.0% | 7.1% |
| Tax rate | 7.4% - 22.6% | 15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 8.0% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.43 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 8.0% |
| Tax rate | 7.4% | 22.6% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 8.0% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KAM.AX | K2 Asset Management Holdings Ltd | 0 | 1.22 | 1.22 |
| ASW.AX | Advanced Share Registry Ltd | 0.01 | 0.3 | 0.3 |
| AVC.AX | Auctus Investment Group Ltd | 0.05 | 0.17 | 0.16 |
| AYI.AX | A1 Investments & Resources Ltd | 0.01 | 0 | 0 |
| CVC.AX | CVC Ltd | 0.34 | -0.05 | -0.04 |
| IQ3.AX | Iq3corp Ltd | 0.56 | 0.98 | 0.66 |
| KBC.AX | Keybridge Capital Ltd | 0.16 | 0.22 | 0.19 |
| MCX.AX | Mariner Corporation Ltd | 0.2 | 0.37 | 0.31 |
| PAC.AX | Pacific Current Group Ltd | 0.18 | 0.16 | 0.14 |
| TIP.AX | Teaminvest Private Group Ltd | 0.49 | -0.55 | -0.38 |
| Low | High | |
| Unlevered beta | 0.15 | 0.24 |
| Relevered beta | 0.15 | 0.24 |
| Adjusted relevered beta | 0.43 | 0.49 |
KAM.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 KAM.AX:
cost_of_equity (7.10%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.43) + 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.