The WACC of 3Cnergy Ltd (502.SI) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.00% - 6.80% | 5.90% |
| Tax rate | -% - -% | -% |
| Cost of debt | 7.00% - 4,053.00% | 2,030.00% |
| WACC | 5.0% - 8.1% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.34 | 0.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.00% | 6.80% |
| Tax rate | -% | -% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 7.00% | 4,053.00% |
| After-tax WACC | 5.0% | 8.1% |
| Selected WACC | 6.6% | |
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 502.SI:
cost_of_equity (5.90%) = risk_free_rate (3.45%) + equity_risk_premium (6.00%) * adjusted_beta (0.34) + 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.