SKF.AX WACC - Weighted Average Cost of Capital
The WACC of Skyfii Ltd (SKF.AX) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.8% - 9.5% | 7.65% |
| Tax rate | 14.9% - 17.9% | 16.4% |
| Cost of debt | 4.0% - 4.9% | 4.45% |
| WACC | 5.4% - 8.8% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 4.1% | 4.6% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.3 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 9.5% |
| Tax rate | 14.9% | 17.9% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 4.0% | 4.9% |
| After-tax WACC | 5.4% | 8.8% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SKF.AX | Skyfii Ltd | 0.16 | 0.56 | 0.49 |
| AV1.AX | Adveritas Ltd | 0.05 | 1.11 | 1.06 |
| CAG.AX | Cape Range Ltd | 0 | -0.87 | -0.87 |
| COO.AX | Corum Group Ltd | 0 | -0.01 | -0.01 |
| DTS.AX | Dragontail Systems Ltd | 0.1 | -0.95 | -0.88 |
| HSC.AX | HSC Technology Group Ltd | 0.22 | 0.57 | 0.48 |
| ICE.AX | Icetana Ltd | 0.01 | -0.46 | -0.45 |
| ID8.AX | identitii Ltd | 0.14 | 2.97 | 2.66 |
| RCL.AX | ReadCloud Ltd | 0.01 | 0.56 | 0.56 |
| SNS.AX | Sensen Networks Ltd | 0.14 | 2.43 | 2.19 |
| Low | High | |
| Unlevered beta | 0.29 | 0.52 |
| Relevered beta | -0.04 | 0.52 |
| Adjusted relevered beta | 0.3 | 0.68 |
SKF.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 SKF.AX:
cost_of_equity (7.65%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (0.3) + 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.