RNT.AX WACC - Weighted Average Cost of Capital
The WACC of Rent.com.au Ltd (RNT.AX) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.6% | 7.65% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.7% - 8.5% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.52 | 0.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.6% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.7% | 8.5% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RNT.AX | Rent.com.au Ltd | 0.01 | 0.32 | 0.31 |
| 2978.T | Tsukuruba Inc | 0.31 | 0.3 | 0.24 |
| 2981.T | Landix Inc | 1.6 | 0.78 | 0.37 |
| AD1.AX | AD1 Holdings Ltd | 0.49 | 0.94 | 0.7 |
| CAR.AX | Carsales.Com Ltd | 0.1 | 1.18 | 1.1 |
| DGH.AX | Desane Group Holdings Ltd | 0.37 | 0.09 | 0.07 |
| DHG.AX | Domain Holdings Australia Ltd | 0.07 | -0.46 | -0.44 |
| HPG.AX | Hipages Group Holdings Ltd | 0.08 | 0.68 | 0.65 |
| JCBNEXT.KL | JcbNext Bhd | 0 | 0.39 | 0.39 |
| RCT.AX | Reef Casino Trust | 0 | -0.06 | -0.06 |
| Low | High | |
| Unlevered beta | 0.29 | 0.37 |
| Relevered beta | 0.28 | 0.37 |
| Adjusted relevered beta | 0.52 | 0.58 |
RNT.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 RNT.AX:
cost_of_equity (7.65%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.52) + 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.