VTG.AX WACC - Weighted Average Cost of Capital
The WACC of Vita Group Ltd (VTG.AX) is 5.4%.
| Range | Selected | |
| Cost of equity | 5.8% - 7.4% | 6.6% |
| Tax rate | 29.5% - 30.5% | 30% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 4.8% - 6.0% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.35 | 0.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 7.4% |
| Tax rate | 29.5% | 30.5% |
| Debt/Equity ratio | 0.5 | 0.5 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 4.8% | 6.0% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VTG.AX | Vita Group Ltd | 0.5 | -0.05 | -0.04 |
| 3322.T | Alpha Group Inc | 0.31 | -0.23 | -0.19 |
| 573.SI | Challenger Technologies Ltd | 0.12 | -0.17 | -0.16 |
| 600122.SS | Jiangsu Hongtu High Technology Co Ltd | 16.56 | 0.89 | 0.07 |
| 6281.TW | E-Life Mall Corp | 0.46 | 0.09 | 0.07 |
| 9444.T | Toshin Holdings Co Ltd | 4.29 | 0.24 | 0.06 |
| JBH.AX | JB Hi-Fi Ltd | 0.06 | 1.32 | 1.27 |
| MOZ.AX | Mosaic Brands Ltd | 17.95 | 1.62 | 0.12 |
| SRY.AX | Story-I Ltd | 9.32 | -0.68 | -0.09 |
| TGA.AX | Thorn Group Ltd | 2.84 | 0.59 | 0.2 |
| Low | High | |
| Unlevered beta | 0.02 | 0.07 |
| Relevered beta | 0.03 | 0.09 |
| Adjusted relevered beta | 0.35 | 0.39 |
VTG.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 VTG.AX:
cost_of_equity (6.60%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.