PGH.AX WACC - Weighted Average Cost of Capital

The WACC of Pact Group Holdings Ltd (PGH.AX) is 6.4%.

The Cost of Equity of Pact Group Holdings Ltd (PGH.AX) is 14.45%.

The Cost of Debt of Pact Group Holdings Ltd (PGH.AX) is 5.50%.

	Range	Selected
Cost of equity	11.50% - 17.40%	14.45%
Tax rate	25.10% - 35.60%	30.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.1% - 7.7%	6.4%

WACC

PGH.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.47	2.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	17.40%

Tax rate	25.10%	35.60%
Debt/Equity ratio	2.98	2.98
Cost of debt	4.00%	7.00%

After-tax WACC	5.1%	7.7%


Selected WACC	6.4%

PGH.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 PGH.AX:

cost_of_equity (14.45%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.47) + 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.