STU.NZ WACC - Weighted Average Cost of Capital
The WACC of Steel & Tube Holdings Ltd (STU.NZ) is 6.7%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.5% | 8.2% |
| Tax rate | 19.5% - 28.2% | 23.85% |
| Cost of debt | 4.0% - 9.6% | 6.8% |
| WACC | 5.2% - 8.2% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.51 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.5% |
| Tax rate | 19.5% | 28.2% |
| Debt/Equity ratio | 0.89 | 0.89 |
| Cost of debt | 4.0% | 9.6% |
| After-tax WACC | 5.2% | 8.2% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| STU.NZ | Steel & Tube Holdings Ltd | 0.89 | 0.73 | 0.45 |
| 007280.KS | Korea Steel Shapes Co Ltd | 2.98 | -0.03 | -0.01 |
| 039240.KQ | Kyeong Nam Steel Co Ltd | 0.17 | 0.01 | 0.01 |
| 103.HK | Shougang Concord Century Holdings Ltd | 0.37 | 0.14 | 0.11 |
| 1203.HK | GDH Guangnan Holdings Ltd | 1.14 | 0.36 | 0.2 |
| 2038.TW | Hai Kwang Enterprise Corp | 1.69 | 0.88 | 0.4 |
| 2069.TW | Yuen Chang Stainless Steel Co Ltd | 1.96 | 0.65 | 0.27 |
| 5658.T | Nichia Steel Works Ltd | 0.21 | 0.55 | 0.48 |
| 6890.HK | Kangli International Holdings Ltd | 1.44 | 0.2 | 0.1 |
| USHAMART.NS | Usha Martin Ltd | 0.03 | 1.38 | 1.35 |
| Low | High | |
| Unlevered beta | 0.16 | 0.32 |
| Relevered beta | 0.27 | 0.52 |
| Adjusted relevered beta | 0.51 | 0.68 |
STU.NZ'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 STU.NZ:
cost_of_equity (8.20%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.51) + 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.