4340.SR
Al Rajhi REIT
Price:  
8.38 
SAR
Volume:  
969,994.00
Saudi Arabia | Equity Real Estate Investment Trusts (REITs)
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4340.SR WACC - Weighted Average Cost of Capital

The WACC of Al Rajhi REIT (4340.SR) is 8.4%.

The Cost of Equity of Al Rajhi REIT (4340.SR) is 10.05%.
The Cost of Debt of Al Rajhi REIT (4340.SR) is 5.00%.

Range Selected
Cost of equity 9.20% - 10.90% 10.05%
Tax rate 20.00% - 20.00% 20.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.7% - 9.0% 8.4%
WACC

4340.SR WACC calculation

Category Low High
Long-term bond rate 5.9% 6.4%
Equity market risk premium 6.1% 7.1%
Adjusted beta 0.54 0.56
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.20% 10.90%
Tax rate 20.00% 20.00%
Debt/Equity ratio 0.39 0.39
Cost of debt 5.00% 5.00%
After-tax WACC 7.7% 9.0%
Selected WACC 8.4%

4340.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 4340.SR:

cost_of_equity (10.05%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (0.54) + 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.