NCK.AX WACC - Weighted Average Cost of Capital
The WACC of Nick Scali Ltd (NCK.AX) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.6% - 9.0% | 7.8% |
| Tax rate | 30.3% - 30.5% | 30.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 8.1% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.5 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 9.0% |
| Tax rate | 30.3% | 30.5% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 8.1% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NCK.AX | Nick Scali Ltd | 0.2 | 1.38 | 1.21 |
| 1049.HK | Celestial Asia Securities Holdings Ltd | 4.15 | 0.7 | 0.18 |
| 1373.HK | International Housewares Retail Co Ltd | 0.87 | 0.32 | 0.2 |
| ADH.AX | Adairs Ltd | 0.58 | 1.81 | 1.29 |
| CCX.AX | City Chic Collective Ltd | 1.73 | 1.29 | 0.58 |
| DSK.AX | Dusk Group Ltd | 0.71 | 0.23 | 0.16 |
| JYC.AX | Joyce Corporation Ltd | 0.21 | 0.17 | 0.15 |
| LOV.AX | Lovisa Holdings Ltd | 0.12 | 1.3 | 1.2 |
| MTO.AX | MotorCycle Holdings Ltd | 0.77 | 0.49 | 0.32 |
| TGA.AX | Thorn Group Ltd | 2.84 | 0.59 | 0.2 |
| Low | High | |
| Unlevered beta | 0.2 | 0.42 |
| Relevered beta | 0.25 | 0.48 |
| Adjusted relevered beta | 0.5 | 0.65 |
NCK.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 NCK.AX:
cost_of_equity (7.80%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.5) + 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.