UMG.AX WACC - Weighted Average Cost of Capital
The WACC of United Malt Group Ltd (UMG.AX) is 6.5%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.8% | 7.75% |
| Tax rate | 31.8% - 34.0% | 32.9% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.5% - 7.5% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.53 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.8% |
| Tax rate | 31.8% | 34.0% |
| Debt/Equity ratio | 0.45 | 0.45 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.5% | 7.5% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| UMG.AX | United Malt Group Ltd | 0.45 | 1.11 | 0.85 |
| AAC.AX | Australian Agricultural Company Ltd | 0.6 | -0.03 | -0.02 |
| BGA.AX | Bega Cheese Ltd | 0.27 | 1.4 | 1.18 |
| BUB.AX | Bubs Australia Ltd | 0.05 | 0.79 | 0.76 |
| FNP.AX | Freedom Foods Group Ltd | 5.56 | 0.01 | 0 |
| HUO.AX | Huon Aquaculture Group Ltd | 0.73 | 0.43 | 0.29 |
| ING.AX | Inghams Group Ltd | 1.2 | 0.42 | 0.23 |
| SFG.AX | Seafarms Group Ltd | 1.37 | 0.74 | 0.39 |
| SGLLV.AX | Ricegrowers Ltd | 0.43 | -0.24 | -0.18 |
| TGR.AX | Tassal Group Ltd | 0.5 | 0.31 | 0.23 |
| Low | High | |
| Unlevered beta | 0.23 | 0.33 |
| Relevered beta | 0.3 | 0.43 |
| Adjusted relevered beta | 0.53 | 0.62 |
UMG.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 UMG.AX:
cost_of_equity (7.75%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.53) + 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.