ZMH.TA WACC - Weighted Average Cost of Capital

The WACC of ZMH Hammerman Ltd (ZMH.TA) is 11.1%.

The Cost of Equity of ZMH Hammerman Ltd (ZMH.TA) is 8.75%.

The Cost of Debt of ZMH Hammerman Ltd (ZMH.TA) is 15.10%.

	Range	Selected
Cost of equity	7.30% - 10.20%	8.75%
Tax rate	10.10% - 13.50%	11.80%
Cost of debt	5.40% - 24.80%	15.10%
WACC	6.0% - 16.2%	11.1%

WACC

ZMH.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.4	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	10.20%

Tax rate	10.10%	13.50%
Debt/Equity ratio	1.16	1.16
Cost of debt	5.40%	24.80%

After-tax WACC	6.0%	16.2%


Selected WACC	11.1%

ZMH.TA'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 ZMH.TA:

cost_of_equity (8.75%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.4) + 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.