AFH.WA WACC - Weighted Average Cost of Capital

The WACC of Aforti Holding SA (AFH.WA) is 5.9%.

The Cost of Equity of Aforti Holding SA (AFH.WA) is 8.90%.

The Cost of Debt of Aforti Holding SA (AFH.WA) is 5.80%.

	Range	Selected
Cost of equity	7.20% - 10.60%	8.90%
Tax rate	1.30% - 3.60%	2.45%
Cost of debt	4.60% - 7.00%	5.80%
WACC	4.7% - 7.1%	5.9%

WACC

AFH.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.26	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.60%

Tax rate	1.30%	3.60%
Debt/Equity ratio	11.02	11.02
Cost of debt	4.60%	7.00%

After-tax WACC	4.7%	7.1%


Selected WACC	5.9%

AFH.WA'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 AFH.WA:

cost_of_equity (8.90%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.26) + 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.