2040.SR
Saudi Ceramic Company SJSC
Price:  
31.90 
SAR
Volume:  
2,857,776.00
Saudi Arabia | Building Products
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2040.SR WACC - Weighted Average Cost of Capital

The WACC of Saudi Ceramic Company SJSC (2040.SR) is 10.0%.

The Cost of Equity of Saudi Ceramic Company SJSC (2040.SR) is 11.55%.
The Cost of Debt of Saudi Ceramic Company SJSC (2040.SR) is 5.00%.

Range Selected
Cost of equity 10.20% - 12.90% 11.55%
Tax rate 10.90% - 11.80% 11.35%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.9% - 11.0% 10.0%
WACC

2040.SR WACC calculation

Category Low High
Long-term bond rate 5.9% 6.4%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.7 0.84
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.20% 12.90%
Tax rate 10.90% 11.80%
Debt/Equity ratio 0.28 0.28
Cost of debt 5.00% 5.00%
After-tax WACC 8.9% 11.0%
Selected WACC 10.0%

2040.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 2040.SR:

cost_of_equity (11.55%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.7) + 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.