RF1.AX WACC - Weighted Average Cost of Capital
The WACC of Regal Investment Fund (RF1.AX) is 7.4%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.7% | 9.9% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.5% - 8.3% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.8 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.7% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.5% | 8.3% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RF1.AX | Regal Investment Fund | 0.99 | 1.46 | 0.86 |
| APL.AX | Antipodes Global Investment Company Ltd | 0.28 | 0.39 | 0.33 |
| CDM.AX | Cadence Capital Ltd | 0.26 | 0.9 | 0.77 |
| CIN.AX | Carlton Investments Ltd | 0 | 0.93 | 0.93 |
| PE1.AX | Pengana Private Equity Trust | 0.08 | 0.18 | 0.17 |
| Low | High | |
| Unlevered beta | 0.59 | 0.8 |
| Relevered beta | 0.7 | 1.15 |
| Adjusted relevered beta | 0.8 | 1.1 |
RF1.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 RF1.AX:
cost_of_equity (9.90%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.