The WACC of Aspen (Group) Holdings Ltd (1F3.SI) is 11.5%.
| Range | Selected | |
| Cost of equity | 6.60% - 9.40% | 8.00% |
| Tax rate | 10.80% - 15.90% | 13.35% |
| Cost of debt | 9.40% - 19.70% | 14.55% |
| WACC | 8.0% - 15.1% | 11.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.76 | 0.94 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.60% | 9.40% |
| Tax rate | 10.80% | 15.90% |
| Debt/Equity ratio | 3.74 | 3.74 |
| Cost of debt | 9.40% | 19.70% |
| After-tax WACC | 8.0% | 15.1% |
| Selected WACC | 11.5% | |
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 1F3.SI:
cost_of_equity (8.00%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.76) + 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.