2001.SR
Methanol Chemicals Company SJSC
Price:  
11.22 
SAR
Volume:  
133,968.00
Saudi Arabia | Chemicals
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2001.SR WACC - Weighted Average Cost of Capital

The WACC of Methanol Chemicals Company SJSC (2001.SR) is 9.1%.

The Cost of Equity of Methanol Chemicals Company SJSC (2001.SR) is 12.90%.
The Cost of Debt of Methanol Chemicals Company SJSC (2001.SR) is 5.00%.

Range Selected
Cost of equity 11.40% - 14.40% 12.90%
Tax rate 3.30% - 5.10% 4.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.3% - 9.9% 9.1%
WACC

2001.SR WACC calculation

Category Low High
Long-term bond rate 5.9% 6.4%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.89 1.05
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.40% 14.40%
Tax rate 3.30% 5.10%
Debt/Equity ratio 0.88 0.88
Cost of debt 5.00% 5.00%
After-tax WACC 8.3% 9.9%
Selected WACC 9.1%

2001.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 2001.SR:

cost_of_equity (12.90%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.89) + 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.