MCE.WA WACC - Weighted Average Cost of Capital

The WACC of Modern Commerce SA (MCE.WA) is 11.7%.

The Cost of Equity of Modern Commerce SA (MCE.WA) is 12.45%.

The Cost of Debt of Modern Commerce SA (MCE.WA) is 6.10%.

	Range	Selected
Cost of equity	11.00% - 13.90%	12.45%
Tax rate	0.80% - 10.50%	5.65%
Cost of debt	4.30% - 7.90%	6.10%
WACC	10.3% - 13.2%	11.7%

WACC

MCE.WA WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.67	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.90%

Tax rate	0.80%	10.50%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.30%	7.90%

After-tax WACC	10.3%	13.2%


Selected WACC	11.7%

MCE.WA'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 MCE.WA:

cost_of_equity (12.45%) = risk_free_rate (7.45%) + equity_risk_premium (6.10%) * adjusted_beta (0.67) + 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.