SPA.AX WACC - Weighted Average Cost of Capital
The WACC of Spacetalk Ltd (SPA.AX) is 7.2%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.6% | 8.35% |
| Tax rate | 7.5% - 14.2% | 10.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.3% - 8.0% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.6 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.6% |
| Tax rate | 7.5% | 14.2% |
| Debt/Equity ratio | 0.42 | 0.42 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.3% | 8.0% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SPA.AX | Spacetalk Ltd | 0.42 | 0.34 | 0.25 |
| 1736.HK | China Parenting Network Holdings Ltd | 1.31 | 0.68 | 0.31 |
| 2978.T | Tsukuruba Inc | 0.24 | 0.21 | 0.17 |
| 4387.T | ZUU Co Ltd | 0.07 | 0.51 | 0.48 |
| AD1.AX | AD1 Holdings Ltd | 0.46 | 0.63 | 0.45 |
| CAR.AX | Carsales.Com Ltd | 0.1 | 1.21 | 1.11 |
| DHG.AX | Domain Holdings Australia Ltd | 0.07 | -0.46 | -0.43 |
| HPG.AX | Hipages Group Holdings Ltd | 0.08 | 0.74 | 0.69 |
| RNT.AX | Rent.com.au Ltd | 0.01 | -0.3 | -0.3 |
| SEK.AX | Seek Ltd | 0.18 | 1.17 | 1.01 |
| Low | High | |
| Unlevered beta | 0.29 | 0.46 |
| Relevered beta | 0.4 | 0.63 |
| Adjusted relevered beta | 0.6 | 0.75 |
SPA.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 SPA.AX:
cost_of_equity (8.35%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.6) + 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.