PFI.NZ WACC - Weighted Average Cost of Capital
The WACC of Property for Industry Ltd (PFI.NZ) is 7.0%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.6% | 8.45% |
| Tax rate | 11.5% - 16.6% | 14.05% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.9% - 8.2% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.57 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.6% |
| Tax rate | 11.5% | 16.6% |
| Debt/Equity ratio | 0.6 | 0.6 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.9% | 8.2% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PFI.NZ | Property for Industry Ltd | 0.6 | 0.47 | 0.31 |
| 2979.T | SOSiLA Logistics REIT Inc | 0.73 | 0.32 | 0.2 |
| 3487.T | CRE Logistics REIT Inc | 0.75 | 0.28 | 0.17 |
| 3493.T | Itochu Advance Logistics Investment Corp | 0.74 | 0.2 | 0.13 |
| ARG.NZ | Argosy Property Ltd | 0.84 | 0.84 | 0.49 |
| FTREIT.BK | Frasers Property Thailand Industrial Freehold & Leasehold REIT | 0.46 | 0.25 | 0.18 |
| K2LU.SI | ARA LOGOS Logistics Trust | 0.78 | 0.82 | 0.5 |
| O5RU.SI | AIMS APAC REIT | 0.65 | 0.42 | 0.27 |
| SPG.NZ | Stride Property Ltd | 0.65 | 1.17 | 0.76 |
| VHP.NZ | Vital Healthcare Property Trust | 1 | 0.86 | 0.47 |
| Low | High | |
| Unlevered beta | 0.24 | 0.37 |
| Relevered beta | 0.36 | 0.57 |
| Adjusted relevered beta | 0.57 | 0.71 |
PFI.NZ'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 PFI.NZ:
cost_of_equity (8.45%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.57) + 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.