1120.SR
Al Rajhi Banking & Investment Corporation SJSC
Price:  
96.50 
SAR
Volume:  
3,904,278.00
Saudi Arabia | Banks
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1120.SR WACC - Weighted Average Cost of Capital

The WACC of Al Rajhi Banking & Investment Corporation SJSC (1120.SR) is 10.9%.

The Cost of Equity of Al Rajhi Banking & Investment Corporation SJSC (1120.SR) is 11.05%.
The Cost of Debt of Al Rajhi Banking & Investment Corporation SJSC (1120.SR) is 5.00%.

Range Selected
Cost of equity 9.70% - 12.40% 11.05%
Tax rate 10.30% - 10.30% 10.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 9.6% - 12.2% 10.9%
WACC

1120.SR WACC calculation

Category Low High
Long-term bond rate 5.9% 6.4%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.63 0.77
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.70% 12.40%
Tax rate 10.30% 10.30%
Debt/Equity ratio 0.02 0.02
Cost of debt 5.00% 5.00%
After-tax WACC 9.6% 12.2%
Selected WACC 10.9%

1120.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 1120.SR:

cost_of_equity (11.05%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.63) + 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.