VTL.NZ
Vital Ltd
Price:  
0.25 
NZD
Volume:  
4,022.00
New Zealand | Wireless Telecommunication Services
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VTL.NZ WACC - Weighted Average Cost of Capital

The WACC of Vital Ltd (VTL.NZ) is 6.0%.

The Cost of Equity of Vital Ltd (VTL.NZ) is 12.30%.
The Cost of Debt of Vital Ltd (VTL.NZ) is 5.50%.

Range Selected
Cost of equity 8.80% - 15.80% 12.30%
Tax rate 28.00% - 30.30% 29.15%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.3% - 7.6% 6.0%
WACC

VTL.NZ WACC calculation

Category Low High
Long-term bond rate 4.3% 4.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.87 1.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 15.80%
Tax rate 28.00% 30.30%
Debt/Equity ratio 3.05 3.05
Cost of debt 4.00% 7.00%
After-tax WACC 4.3% 7.6%
Selected WACC 6.0%

VTL.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 VTL.NZ:

cost_of_equity (12.30%) = risk_free_rate (4.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.87) + 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.