QIP.AX WACC - Weighted Average Cost of Capital

The WACC of QANTM Intellectual Property Ltd (QIP.AX) is 8.1%.

The Cost of Equity of QANTM Intellectual Property Ltd (QIP.AX) is 8.90%.

The Cost of Debt of QANTM Intellectual Property Ltd (QIP.AX) is 5.50%.

	Range	Selected
Cost of equity	7.50% - 10.30%	8.90%
Tax rate	33.90% - 34.50%	34.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.8% - 9.5%	8.1%

WACC

QIP.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.68	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	10.30%

Tax rate	33.90%	34.50%
Debt/Equity ratio	0.18	0.18
Cost of debt	4.00%	7.00%

After-tax WACC	6.8%	9.5%


Selected WACC	8.1%

QIP.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 QIP.AX:

cost_of_equity (8.90%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.68) + 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.