WAT.AX WACC - Weighted Average Cost of Capital
The WACC of Waterco Ltd (WAT.AX) is 7.0%.
| Range | Selected | |
| Cost of equity | 6.4% - 9.5% | 7.95% |
| Tax rate | 22.5% - 23.4% | 22.95% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.5% - 8.4% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.47 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 9.5% |
| Tax rate | 22.5% | 23.4% |
| Debt/Equity ratio | 0.36 | 0.36 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.5% | 8.4% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| WAT.AX | Waterco Ltd | 0.36 | 0.06 | 0.05 |
| 056080.KQ | Yujin Robot Co Ltd | 0.01 | 1 | 1 |
| 066910.KQ | Sonokong Co Ltd | 0.55 | 1.47 | 1.03 |
| 1348.HK | Quali-Smart Holdings Ltd | 0.37 | 0.22 | 0.18 |
| 1526.TW | Sun Race Sturmey-Archer Inc | 0.64 | 0.81 | 0.54 |
| 180.HK | Kader Holdings Co Ltd | 2.67 | 0.41 | 0.14 |
| 209.HK | Winshine Science Co Ltd | 9.78 | 0.31 | 0.04 |
| 7841.T | Endo Manufacturing Co Ltd | 0.03 | 0.68 | 0.67 |
| ATLASCYCLE.NS | Atlas Cycles Haryana Ltd | 0.16 | 0.46 | 0.41 |
| BCV.SI | Qian Hu Corporation Ltd | 0.38 | -0.23 | -0.18 |
| Low | High | |
| Unlevered beta | 0.16 | 0.46 |
| Relevered beta | 0.21 | 0.6 |
| Adjusted relevered beta | 0.47 | 0.73 |
WAT.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 WAT.AX:
cost_of_equity (7.95%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + 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.