MSV.AX
Mitchell Services Ltd
Price:  
0.26 
AUD
Volume:  
431,340
Australia | Metals & Mining

MSV.AX WACC - Weighted Average Cost of Capital

The WACC of Mitchell Services Ltd (MSV.AX) is 8.7%.

The Cost of Equity of Mitchell Services Ltd (MSV.AX) is 10.65%.
The Cost of Debt of Mitchell Services Ltd (MSV.AX) is 5.5%.

RangeSelected
Cost of equity9.1% - 12.2%10.65%
Tax rate28.9% - 31.0%29.95%
Cost of debt4.0% - 7.0%5.5%
WACC7.3% - 10.1%8.7%
WACC

MSV.AX WACC calculation

CategoryLowHigh
Long-term bond rate4.0%4.5%
Equity market risk premium5.1%6.1%
Adjusted beta0.991.18
Additional risk adjustments0.0%0.5%
Cost of equity9.1%12.2%
Tax rate28.9%31.0%
Debt/Equity ratio
0.390.39
Cost of debt4.0%7.0%
After-tax WACC7.3%10.1%
Selected WACC8.7%

MSV.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 MSV.AX:

cost_of_equity (10.65%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.99) + 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.