KTE.AX WACC - Weighted Average Cost of Capital
The WACC of K2 Energy Ltd (KTE.AX) is 5.8%.
| Range | Selected | |
| Cost of equity | 6.3% - 9.9% | 8.1% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 6.7% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.55 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 9.9% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 6.7% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| KTE.AX | K2 Energy Ltd | 1.17 | 2.61 | 1.43 |
| 025560.KS | Mirae Corp | 0.32 | 0.43 | 0.35 |
| 5216.T | Kuramoto Co Ltd | 0.04 | 1.21 | 1.18 |
| 5TY.SI | Advanced Systems Automation Ltd | 0.15 | 1.48 | 1.33 |
| 6596.T | Tsukubaseiko Co Ltd | 0.11 | -0.08 | -0.07 |
| 8257.HK | Genes Tech Group Holdings Co Ltd | 2.7 | 2.1 | 0.73 |
| BLG.AX | BluGlass Ltd | 0.23 | 0.45 | 0.39 |
| DTZ.AX | Dotz Nano Ltd | 0.01 | -0.37 | -0.37 |
| GENETEC.KL | Genetec Technology Bhd | 0.03 | 2.12 | 2.07 |
| MQTECH.KL | MQ Technology Bhd | 0.01 | 1.13 | 1.13 |
| TURIYA.KL | Turiya Bhd | 0.55 | 1.55 | 1.12 |
| Low | High | |
| Unlevered beta | 0.73 | 1.13 |
| Relevered beta | 0.33 | 0.85 |
| Adjusted relevered beta | 0.55 | 0.9 |
KTE.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 KTE.AX:
cost_of_equity (8.10%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.55) + 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.