1180.SR
National Commercial Bank SJSC
Price:  
34.7 
SAR
Volume:  
5,247,930
Saudi Arabia | Banks

1180.SR WACC - Weighted Average Cost of Capital

The WACC of National Commercial Bank SJSC (1180.SR) is 8.8%.

The Cost of Equity of National Commercial Bank SJSC (1180.SR) is 12.75%.
The Cost of Debt of National Commercial Bank SJSC (1180.SR) is 5%.

RangeSelected
Cost of equity10.9% - 14.6%12.75%
Tax rate11.1% - 11.5%11.3%
Cost of debt5.0% - 5.0%5%
WACC7.8% - 9.8%8.8%
WACC

1180.SR WACC calculation

CategoryLowHigh
Long-term bond rate5.9%6.4%
Equity market risk premium6.1%7.1%
Adjusted beta0.811.09
Additional risk adjustments0.0%0.5%
Cost of equity10.9%14.6%
Tax rate11.1%11.5%
Debt/Equity ratio
0.920.92
Cost of debt5.0%5.0%
After-tax WACC7.8%9.8%
Selected WACC8.8%

1180.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 1180.SR:

cost_of_equity (12.75%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.81) + 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.