1R6.SI WACC - Weighted Average Cost of Capital

The WACC of Avi-Tech Holdings Ltd (1R6.SI) is 6.4%.

The Cost of Equity of Avi-Tech Holdings Ltd (1R6.SI) is 6.40%.

The Cost of Debt of Avi-Tech Holdings Ltd (1R6.SI) is 5.50%.

	Range	Selected
Cost of equity	5.50% - 7.30%	6.40%
Tax rate	16.90% - 18.20%	17.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.5% - 7.3%	6.4%

WACC

1R6.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.55	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.30%

Tax rate	16.90%	18.20%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	7.00%

After-tax WACC	5.5%	7.3%


Selected WACC	6.4%

1R6.SI'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 1R6.SI:

cost_of_equity (6.40%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.55) + 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.