PSW.WA WACC - Weighted Average Cost of Capital

The WACC of PGS Software SA (PSW.WA) is 12.6%.

The Cost of Equity of PGS Software SA (PSW.WA) is 12.85%.

The Cost of Debt of PGS Software SA (PSW.WA) is 5.50%.

	Range	Selected
Cost of equity	11.30% - 14.40%	12.85%
Tax rate	14.00% - 18.70%	16.35%
Cost of debt	4.00% - 7.00%	5.50%
WACC	11.1% - 14.1%	12.6%

WACC

PSW.WA WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	5.6%	6.6%
Adjusted beta	0.73	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	14.40%

Tax rate	14.00%	18.70%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	7.00%

After-tax WACC	11.1%	14.1%


Selected WACC	12.6%

PSW.WA'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 PSW.WA:

cost_of_equity (12.85%) = risk_free_rate (7.45%) + equity_risk_premium (6.10%) * adjusted_beta (0.73) + 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.