RHP.AX WACC - Weighted Average Cost of Capital
The WACC of rhipe Ltd (RHP.AX) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.4% - 10.6% | 9.5% |
| Tax rate | 30.5% - 33.5% | 32% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 8.3% - 10.6% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.99 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 10.6% |
| Tax rate | 30.5% | 33.5% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 8.3% | 10.6% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RHP.AX | rhipe Ltd | 0.01 | 0.77 | 0.77 |
| 020120.KS | KidariStudio Inc | 0.32 | 0.26 | 0.21 |
| 242040.KQ | Namu Tech Co Ltd | 0.44 | 0.8 | 0.62 |
| 4012.T | Axis Co Ltd | 1.19 | 0.48 | 0.26 |
| 4169.T | Enechange Ltd | 0.28 | 0.77 | 0.65 |
| 7068.T | Feedforce Inc | 0.18 | 0.72 | 0.64 |
| APX.AX | Appen Ltd | 0.05 | 3.26 | 3.17 |
| DTL.AX | Data#3 Ltd | 0.02 | 0.93 | 0.92 |
| MMAG.KL | MMAG Holdings Bhd | 0.22 | 0.33 | 0.29 |
| OTW.AX | Over The Wire Holdings Ltd | 0.16 | 0.72 | 0.65 |
| Low | High | |
| Unlevered beta | 0.63 | 0.65 |
| Relevered beta | 0.99 | 1.04 |
| Adjusted relevered beta | 0.99 | 1.03 |
RHP.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 RHP.AX:
cost_of_equity (9.50%) = risk_free_rate (3.95%) + equity_risk_premium (5.20%) * adjusted_beta (0.99) + 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.