PCG.AX WACC - Weighted Average Cost of Capital

The WACC of Pengana Capital Group Ltd (PCG.AX) is 6.9%.

The Cost of Equity of Pengana Capital Group Ltd (PCG.AX) is 7.30%.

The Cost of Debt of Pengana Capital Group Ltd (PCG.AX) is 4.30%.

	Range	Selected
Cost of equity	6.30% - 8.30%	7.30%
Tax rate	24.60% - 32.70%	28.65%
Cost of debt	4.00% - 4.60%	4.30%
WACC	6.0% - 7.8%	6.9%

WACC

PCG.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.45	0.53

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	8.30%

Tax rate	24.60%	32.70%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	4.60%

After-tax WACC	6.0%	7.8%


Selected WACC	6.9%

PCG.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 PCG.AX:

cost_of_equity (7.30%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.45) + 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.