RDG.WA WACC - Weighted Average Cost of Capital

The WACC of Read Gene SA (RDG.WA) is 8.4%.

The Cost of Equity of Read Gene SA (RDG.WA) is 8.65%.

The Cost of Debt of Read Gene SA (RDG.WA) is 7.00%.

	Range	Selected
Cost of equity	7.90% - 9.40%	8.65%
Tax rate	12.40% - 21.40%	16.90%
Cost of debt	7.00% - 7.00%	7.00%
WACC	7.8% - 9.1%	8.4%

WACC

RDG.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.38	0.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	9.40%

Tax rate	12.40%	21.40%
Debt/Equity ratio	0.09	0.09
Cost of debt	7.00%	7.00%

After-tax WACC	7.8%	9.1%


Selected WACC	8.4%

RDG.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 RDG.WA:

cost_of_equity (8.65%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.38) + 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.