PFT.AX WACC - Weighted Average Cost of Capital
The WACC of Pure Foods Tasmania Ltd (PFT.AX) is 5.2%.
| Range | Selected | |
| Cost of equity | 6.5% - 9.2% | 7.85% |
| Tax rate | 20.3% - 22.5% | 21.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 5.6% | 5.2% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.48 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.5% | 9.2% |
| Tax rate | 20.3% | 22.5% |
| Debt/Equity ratio | 2.07 | 2.07 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 5.6% |
| Selected WACC | 5.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PFT.AX | Pure Foods Tasmania Ltd | 2.07 | -3.01 | -1.15 |
| 5EG.SI | Zhongxin Fruit and Juice Ltd | 0.42 | 0.11 | 0.08 |
| FFI.AX | FFI Holdings Ltd | 0.07 | -0.56 | -0.53 |
| FNP.AX | Freedom Foods Group Ltd | 5.56 | 0.01 | 0 |
| FOD.AX | Food Revolution Group Ltd | 0.57 | 0.2 | 0.14 |
| KTD.AX | Keytone Dairy Corporation Ltd | 0.5 | 1.07 | 0.77 |
| LV1.AX | Live Verdure Ltd | 0 | 0.3 | 0.3 |
| NUC.AX | Nuchev Ltd | 0.01 | 1.7 | 1.68 |
| NZS.AX | New Zealand Coastal Seafoods Ltd | 0.3 | 1.6 | 1.3 |
| PCAR.JK | Prima Cakrawala Abadi Tbk PT | 0.35 | -0.22 | -0.18 |
| TFL.AX | Tasfoods Ltd | 4.7 | 0.4 | 0.09 |
| Low | High | |
| Unlevered beta | 0.08 | 0.14 |
| Relevered beta | 0.22 | 0.54 |
| Adjusted relevered beta | 0.48 | 0.69 |
PFT.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 PFT.AX:
cost_of_equity (7.85%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.