RMC.AX WACC - Weighted Average Cost of Capital

The WACC of Resimac Group Ltd (RMC.AX) is 4.2%.

The Cost of Equity of Resimac Group Ltd (RMC.AX) is 18.25%.

The Cost of Debt of Resimac Group Ltd (RMC.AX) is 5.50%.

	Range	Selected
Cost of equity	14.00% - 22.50%	18.25%
Tax rate	29.80% - 30.30%	30.05%
Cost of debt	4.00% - 7.00%	5.50%
WACC	3.1% - 5.3%	4.2%

WACC

RMC.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.96	2.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	22.50%

Tax rate	29.80%	30.30%
Debt/Equity ratio	43.15	43.15
Cost of debt	4.00%	7.00%

After-tax WACC	3.1%	5.3%


Selected WACC	4.2%

RMC.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 RMC.AX:

cost_of_equity (18.25%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.96) + 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.