QRI.AX WACC - Weighted Average Cost of Capital
The WACC of Qualitas Real Estate Income Fund (QRI.AX) is 7.1%.
| Range | Selected | |
| Cost of equity | 9.3% - 12.1% | 10.7% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 7.8% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.04 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 12.1% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 7.8% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| QRI.AX | Qualitas Real Estate Income Fund | 0.97 | 0.07 | 0.04 |
| APL.AX | Antipodes Global Investment Company Ltd | 0.24 | 0.69 | 0.59 |
| CDM.AX | Cadence Capital Ltd | 0.27 | 0.9 | 0.76 |
| PE1.AX | Pengana Private Equity Trust | 0.07 | 0.18 | 0.18 |
| PGF.AX | PM Capital Global Opportunities Fund Ltd | 0.04 | 0.89 | 0.86 |
| Low | High | |
| Unlevered beta | 0.43 | 0.66 |
| Relevered beta | 1.06 | 1.22 |
| Adjusted relevered beta | 1.04 | 1.15 |
QRI.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 QRI.AX:
cost_of_equity (10.70%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.04) + 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.