The WACC of Taleem REIT Fund (4333.SR) is 9.3%.
| Range | Selected | |
| Cost of equity | 8.80% - 11.90% | 10.35% |
| Tax rate | 2.80% - 4.90% | 3.85% |
| Cost of debt | 6.80% - 9.00% | 7.90% |
| WACC | 8.0% - 10.7% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 5.9% | 6.4% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.47 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.80% | 11.90% |
| Tax rate | 2.80% | 4.90% |
| Debt/Equity ratio | 0.58 | 0.58 |
| Cost of debt | 6.80% | 9.00% |
| After-tax WACC | 8.0% | 10.7% |
| Selected WACC | 9.3% | |
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 4333.SR:
cost_of_equity (10.35%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.47) + 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.