JLG.AX WACC - Weighted Average Cost of Capital

The WACC of Johns Lyng Group Ltd (JLG.AX) is 10.0%.

The Cost of Equity of Johns Lyng Group Ltd (JLG.AX) is 10.40%.

The Cost of Debt of Johns Lyng Group Ltd (JLG.AX) is 5.50%.

	Range	Selected
Cost of equity	8.40% - 12.40%	10.40%
Tax rate	30.80% - 31.80%	31.30%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.1% - 11.9%	10.0%

WACC

JLG.AX WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.86	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	12.40%

Tax rate	30.80%	31.80%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	7.00%

After-tax WACC	8.1%	11.9%


Selected WACC	10.0%

JLG.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 JLG.AX:

cost_of_equity (10.40%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.86) + 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.