MOC.AX WACC - Weighted Average Cost of Capital
The WACC of Mortgage Choice Ltd (MOC.AX) is 5.8%.
| Range | Selected | |
| Cost of equity | 6.3% - 9.2% | 7.75% |
| Tax rate | 30.6% - 30.9% | 30.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.0% - 6.5% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.56 | 0.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 9.2% |
| Tax rate | 30.6% | 30.9% |
| Debt/Equity ratio | 0.86 | 0.86 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.0% | 6.5% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MOC.AX | Mortgage Choice Ltd | 0.86 | 1.17 | 0.73 |
| 1273.HK | Hong Kong Finance Group Ltd | 0.91 | 0.14 | 0.09 |
| ABA.AX | Auswide Bank Ltd | 2.34 | 0.24 | 0.09 |
| AFG.AX | Australian Finance Group Ltd | 8.12 | 0.95 | 0.14 |
| GEN.NZ | General Capital Ltd | 7.06 | 0.47 | 0.08 |
| GICHSGFIN.NS | GIC Housing Finance Ltd | 8.24 | 1.4 | 0.21 |
| GMA.AX | Genworth Mortgage Insurance Australia Ltd | 0.19 | 1.46 | 1.28 |
| MYS.AX | MyState Ltd | 3.12 | 1.27 | 0.4 |
| N1H.AX | N1 Holdings Ltd | 10.67 | -0.93 | -0.11 |
| YBR.AX | Yellow Brick Road Holdings Ltd | 0.19 | -0.1 | -0.09 |
| Low | High | |
| Unlevered beta | 0.09 | 0.17 |
| Relevered beta | 0.34 | 0.69 |
| Adjusted relevered beta | 0.56 | 0.79 |
MOC.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 MOC.AX:
cost_of_equity (7.75%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.56) + 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.