VVA.AX WACC - Weighted Average Cost of Capital

The WACC of Viva Leisure Ltd (VVA.AX) is 6.1%.

The Cost of Equity of Viva Leisure Ltd (VVA.AX) is 12.15%.

The Cost of Debt of Viva Leisure Ltd (VVA.AX) is 5.50%.

	Range	Selected
Cost of equity	10.70% - 13.60%	12.15%
Tax rate	30.80% - 32.30%	31.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.0% - 7.2%	6.1%

WACC

VVA.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.31	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	13.60%

Tax rate	30.80%	32.30%
Debt/Equity ratio	2.55	2.55
Cost of debt	4.00%	7.00%

After-tax WACC	5.0%	7.2%


Selected WACC	6.1%

VVA.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 VVA.AX:

cost_of_equity (12.15%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (1.31) + 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.