PE1.AX WACC - Weighted Average Cost of Capital
The WACC of Pengana Private Equity Trust (PE1.AX) is 8.8%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.3% | 9.15% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 9.8% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.77 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.3% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 9.8% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PE1.AX | Pengana Private Equity Trust | 0.07 | 0.18 | 0.18 |
| CAM.AX | Clime Capital Ltd | 0.32 | 0.63 | 0.52 |
| CDM.AX | Cadence Capital Ltd | 0.27 | 0.9 | 0.76 |
| NSC.AX | NAOS Small Cap Opportunities Company Ltd | 0.81 | 0.98 | 0.63 |
| PGF.AX | PM Capital Global Opportunities Fund Ltd | 0.04 | 0.89 | 0.86 |
| SNC.AX | Sandon Capital Investments Ltd | 0.25 | 0.99 | 0.84 |
| Low | High | |
| Unlevered beta | 0.63 | 0.76 |
| Relevered beta | 0.66 | 0.79 |
| Adjusted relevered beta | 0.77 | 0.86 |
PE1.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 PE1.AX:
cost_of_equity (9.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.77) + 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.