The WACC of Saudia Dairy and Foodstuff Company SJSC (2270.SR) is 12.3%.
Range | Selected | |
Cost of equity | 11.1% - 13.5% | 12.3% |
Tax rate | 7.7% - 8.2% | 7.95% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 11.0% - 13.5% | 12.3% |
Category | Low | High |
Long-term bond rate | 5.9% | 6.4% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.85 | 0.93 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.1% | 13.5% |
Tax rate | 7.7% | 8.2% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 11.0% | 13.5% |
Selected WACC | 12.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2270.SR | Saudia Dairy and Foodstuff Company SJSC | 0.01 | 0.9 | 0.9 |
2050.SR | Savola Group Co | 0.87 | 0.92 | 0.51 |
2100.SR | Wafrah for Industry and Development Company SJSC | 0.03 | 1.53 | 1.49 |
2280.SR | Almarai Company SJSC | 0.21 | 0.93 | 0.78 |
300138.SZ | Chenguang Biotech Group Co Ltd | 0.75 | 1.26 | 0.75 |
4080.SR | Aseer Trading Tourism & Manufacturing Co SJSC | 0.43 | 1.24 | 0.89 |
6001.SR | Halwani Brothers Company JSC | 0.17 | 1.26 | 1.1 |
600127.SS | Jinjian Cereals Industry Co Ltd | 0.16 | 0.61 | 0.53 |
603711.SS | Xiangpiaopiao Food Co Ltd | 0.12 | 1.59 | 1.43 |
ULTJ.JK | Ultrajaya Milk Industry Tbk PT | 0 | 0.53 | 0.53 |
Low | High | |
Unlevered beta | 0.77 | 0.89 |
Relevered beta | 0.78 | 0.9 |
Adjusted relevered beta | 0.85 | 0.93 |
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 2270.SR:
cost_of_equity (12.30%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.85) + 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.