PDL.AX WACC - Weighted Average Cost of Capital
The WACC of Pendal Group Ltd (PDL.AX) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.3% - 11.7% | 10% |
| Tax rate | 23.5% - 23.9% | 23.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.1% - 11.3% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.84 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.3% | 11.7% |
| Tax rate | 23.5% | 23.9% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.1% | 11.3% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PDL.AX | Pendal Group Ltd | 0.05 | 1.56 | 1.5 |
| AEF.AX | Australian Ethical Investment Ltd | 0 | 0.26 | 0.26 |
| EQT.AX | EQT Holdings Ltd | 0.09 | 0.91 | 0.85 |
| IFL.AX | IOOF Holdings Ltd | 0.35 | 0.34 | 0.27 |
| NGI.AX | Navigator Global Investments Ltd | 0.04 | 0.59 | 0.58 |
| NWL.AX | Netwealth Group Ltd | 0 | 2.08 | 2.07 |
| PAC.AX | Pacific Current Group Ltd | 0.18 | 0.19 | 0.17 |
| PPT.AX | Perpetual Ltd | 0.35 | 1.42 | 1.12 |
| PTM.AX | Platinum Asset Management Ltd | 0.04 | 1.63 | 1.57 |
| VGI.AX | Vgi Partners Ltd | 0 | 1.09 | 1.09 |
| Low | High | |
| Unlevered beta | 0.74 | 1.1 |
| Relevered beta | 0.76 | 1.15 |
| Adjusted relevered beta | 0.84 | 1.1 |
PDL.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 PDL.AX:
cost_of_equity (10.00%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.84) + 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.