RBW.WA WACC - Weighted Average Cost of Capital

The WACC of Rainbow Tours SA (RBW.WA) is 12.5%.

The Cost of Equity of Rainbow Tours SA (RBW.WA) is 12.70%.

The Cost of Debt of Rainbow Tours SA (RBW.WA) is 8.50%.

	Range	Selected
Cost of equity	11.10% - 14.30%	12.70%
Tax rate	17.30% - 19.60%	18.45%
Cost of debt	6.10% - 10.90%	8.50%
WACC	10.8% - 14.1%	12.5%

WACC

RBW.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.89	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.30%

Tax rate	17.30%	19.60%
Debt/Equity ratio	0.05	0.05
Cost of debt	6.10%	10.90%

After-tax WACC	10.8%	14.1%


Selected WACC	12.5%

RBW.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 RBW.WA:

cost_of_equity (12.70%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.89) + 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.