1010.SR
Riyad Bank SJSC
Price:  
30.30 
SAR
Volume:  
1,835,313.00
Saudi Arabia | Banks
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1010.SR WACC - Weighted Average Cost of Capital

The WACC of Riyad Bank SJSC (1010.SR) is 11.7%.

The Cost of Equity of Riyad Bank SJSC (1010.SR) is 12.75%.
The Cost of Debt of Riyad Bank SJSC (1010.SR) is 5.00%.

Range Selected
Cost of equity 11.40% - 14.10% 12.75%
Tax rate 10.30% - 10.30% 10.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 10.5% - 12.9% 11.7%
WACC

1010.SR WACC calculation

Category Low High
Long-term bond rate 5.9% 6.4%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.91 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.40% 14.10%
Tax rate 10.30% 10.30%
Debt/Equity ratio 0.15 0.15
Cost of debt 5.00% 5.00%
After-tax WACC 10.5% 12.9%
Selected WACC 11.7%

1010.SR'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 1010.SR:

cost_of_equity (12.75%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.91) + 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.