VG8.AX WACC - Weighted Average Cost of Capital

The WACC of VGI Partners Asian Investments Ltd (VG8.AX) is 8.9%.

The Cost of Equity of VGI Partners Asian Investments Ltd (VG8.AX) is 10.55%.

The Cost of Debt of VGI Partners Asian Investments Ltd (VG8.AX) is 5.50%.

	Range	Selected
Cost of equity	9.30% - 11.80%	10.55%
Tax rate	28.20% - 29.40%	28.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.7% - 10.0%	8.9%

WACC

VG8.AX WACC calculation

Category	Low	High

Long-term bond rate	4.1%	4.6%
Equity market risk premium	5.5%	6.5%
Adjusted beta	0.95	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	11.80%

Tax rate	28.20%	29.40%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.00%	7.00%

After-tax WACC	7.7%	10.0%


Selected WACC	8.9%

VG8.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 VG8.AX:

cost_of_equity (10.55%) = risk_free_rate (4.35%) + equity_risk_premium (6.00%) * adjusted_beta (0.95) + 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.