1050.SR WACC - Weighted Average Cost of Capital
The WACC of Banque Saudi Fransi SJSC (1050.SR) is 8.4%.
| Range | Selected | |
| Cost of equity | 12.7% - 18.7% | 15.7% |
| Tax rate | 10.3% - 10.5% | 10.4% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.3% - 9.4% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 5.9% | 6.4% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.1 | 1.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.7% | 18.7% |
| Tax rate | 10.3% | 10.5% |
| Debt/Equity ratio | 1.87 | 1.87 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.3% | 9.4% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1050.SR | Banque Saudi Fransi SJSC | 1.87 | 1.2 | 0.45 |
| 1010.SR | Riyad Bank SJSC | 0.16 | 1.44 | 1.26 |
| 1020.SR | Bank Aljazira JSC | 0.75 | 1.06 | 0.63 |
| 1030.SR | Saudi Investment Bank SJSC | 1.34 | 0.78 | 0.36 |
| 1060.SR | Saudi British Bank SJSC | 0.43 | 1.35 | 0.98 |
| 1080.SR | Arab National Bank | 0.09 | 1.13 | 1.04 |
| 1140.SR | Bank Albilad Sjsc | 0.08 | 0.95 | 0.89 |
| 1150.SR | Alinma Bank SJSC | 1.53 | 0.96 | 0.4 |
| 5876.TW | Shanghai Commercial & Savings Bank Ltd | 0.29 | 0.08 | 0.06 |
| EIB.DB | Emirates Islamic Bank PJSC | 0.5 | -0.23 | -0.16 |
| Low | High | |
| Unlevered beta | 0.43 | 0.74 |
| Relevered beta | 1.15 | 1.97 |
| Adjusted relevered beta | 1.1 | 1.65 |
1050.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 1050.SR:
cost_of_equity (15.70%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (1.1) + 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.