The WACC of China Star Food Group Ltd (42W.SI) is 12.4%.
| Range | Selected | |
| Cost of equity | 6.00% - 9.20% | 7.60% |
| Tax rate | 31.70% - 38.00% | 34.85% |
| Cost of debt | 4.00% - 93.40% | 48.70% |
| WACC | 5.3% - 19.6% | 12.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.64 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.00% | 9.20% |
| Tax rate | 31.70% | 38.00% |
| Debt/Equity ratio | 0.27 | 0.27 |
| Cost of debt | 4.00% | 93.40% |
| After-tax WACC | 5.3% | 19.6% |
| Selected WACC | 12.4% | |
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 42W.SI:
cost_of_equity (7.60%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.64) + 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.