KMD.NZ
Kathmandu Holdings Ltd
Price:  
0.35 
NZD
Volume:  
88,499.00
New Zealand | Specialty Retail
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KMD.NZ WACC - Weighted Average Cost of Capital

The WACC of Kathmandu Holdings Ltd (KMD.NZ) is 8.2%.

The Cost of Equity of Kathmandu Holdings Ltd (KMD.NZ) is 12.90%.
The Cost of Debt of Kathmandu Holdings Ltd (KMD.NZ) is 7.00%.

Range Selected
Cost of equity 9.80% - 16.00% 12.90%
Tax rate 18.60% - 27.10% 22.85%
Cost of debt 7.00% - 7.00% 7.00%
WACC 7.2% - 9.2% 8.2%
WACC

KMD.NZ WACC calculation

Category Low High
Long-term bond rate 4.3% 4.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.07 1.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.80% 16.00%
Tax rate 18.60% 27.10%
Debt/Equity ratio 1.65 1.65
Cost of debt 7.00% 7.00%
After-tax WACC 7.2% 9.2%
Selected WACC 8.2%

KMD.NZ'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 KMD.NZ:

cost_of_equity (12.90%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (1.07) + 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.