The WACC of Move Logistics Group Ltd (MOV.NZ) is 12.0%.
| Range | Selected | |
| Cost of equity | 28.60% - 41.40% | 35.00% |
| Tax rate | 4.90% - 10.20% | 7.55% |
| Cost of debt | 4.00% - 16.10% | 10.05% |
| WACC | 6.6% - 17.5% | 12.0% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 4.75 | 5.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.60% | 41.40% |
| Tax rate | 4.90% | 10.20% |
| Debt/Equity ratio | 7.88 | 7.88 |
| Cost of debt | 4.00% | 16.10% |
| After-tax WACC | 6.6% | 17.5% |
| Selected WACC | 12.0% | |
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 MOV.NZ:
cost_of_equity (35.00%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (4.75) + 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.