MFT.NZ
Mainfreight Ltd
Price:  
64.01 
NZD
Volume:  
70,613
New Zealand | Air Freight & Logistics

MFT.NZ WACC - Weighted Average Cost of Capital

The WACC of Mainfreight Ltd (MFT.NZ) is 8.2%.

The Cost of Equity of Mainfreight Ltd (MFT.NZ) is 9.15%.
The Cost of Debt of Mainfreight Ltd (MFT.NZ) is 5.5%.

RangeSelected
Cost of equity7.6% - 10.7%9.15%
Tax rate27.9% - 28.4%28.15%
Cost of debt4.0% - 7.0%5.5%
WACC6.8% - 9.7%8.2%
WACC

MFT.NZ WACC calculation

CategoryLowHigh
Long-term bond rate4.3%4.8%
Equity market risk premium5.1%6.1%
Adjusted beta0.640.88
Additional risk adjustments0.0%0.5%
Cost of equity7.6%10.7%
Tax rate27.9%28.4%
Debt/Equity ratio
0.210.21
Cost of debt4.0%7.0%
After-tax WACC6.8%9.7%
Selected WACC8.2%

MFT.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 MFT.NZ:

cost_of_equity (9.15%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.64) + 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.