TPW.AX WACC - Weighted Average Cost of Capital
The WACC of Temple & Webster Group Ltd (TPW.AX) is 8.9%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.1% | 8.95% |
| Tax rate | 29.2% - 47.1% | 38.15% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 7.7% - 10.1% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.73 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.1% |
| Tax rate | 29.2% | 47.1% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 7.7% | 10.1% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TPW.AX | Temple & Webster Group Ltd | 0.01 | 1.97 | 1.96 |
| 1137.HK | Hong Kong Television Network Ltd | 0.34 | 0.49 | 0.39 |
| 2101.HK | Fulu Holdings Ltd | 0.3 | 0.21 | 0.17 |
| 2614.TW | Eastern Media International Corp | 2.42 | 0.26 | 0.1 |
| 290510.KQ | KoreaCenter Co Ltd | 0.19 | 1 | 0.88 |
| 3665.T | Enigmo Inc | 0.02 | 0.68 | 0.67 |
| ABY.AX | Adore Beauty Group Ltd | 0.03 | 0.61 | 0.6 |
| HT8.AX | Harris Technology Group Ltd | 0.96 | 0.99 | 0.59 |
| KGN.AX | Kogan.com Ltd | 0.05 | 1.04 | 1.01 |
| MYD.AX | Mydeal.ComAu Pty Ltd | 0 | 0.99 | 0.99 |
| Low | High | |
| Unlevered beta | 0.6 | 0.76 |
| Relevered beta | 0.6 | 0.76 |
| Adjusted relevered beta | 0.73 | 0.84 |
TPW.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 TPW.AX:
cost_of_equity (8.95%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.73) + 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.