PCG.AX
Pengana Capital Group Ltd
Price:  
0.83 
AUD
Volume:  
161.00
Australia | Capital Markets
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PCG.AX WACC - Weighted Average Cost of Capital

The WACC of Pengana Capital Group Ltd (PCG.AX) is 7.0%.

The Cost of Equity of Pengana Capital Group Ltd (PCG.AX) is 7.50%.
The Cost of Debt of Pengana Capital Group Ltd (PCG.AX) is 4.30%.

Range Selected
Cost of equity 6.40% - 8.60% 7.50%
Tax rate 24.60% - 32.70% 28.65%
Cost of debt 4.00% - 4.60% 4.30%
WACC 6.0% - 8.0% 7.0%
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 0.47 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.60%
Tax rate 24.60% 32.70%
Debt/Equity ratio 0.12 0.12
Cost of debt 4.00% 4.60%
After-tax WACC 6.0% 8.0%
Selected WACC 7.0%

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 (7.50%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.