5AB.SI WACC - Weighted Average Cost of Capital

The WACC of Trek 2000 International Ltd (5AB.SI) is 6.6%.

The Cost of Equity of Trek 2000 International Ltd (5AB.SI) is 6.55%.

The Cost of Debt of Trek 2000 International Ltd (5AB.SI) is 7.45%.

	Range	Selected
Cost of equity	5.20% - 7.90%	6.55%
Tax rate	0.30% - 2.10%	1.20%
Cost of debt	7.00% - 7.90%	7.45%
WACC	5.2% - 7.9%	6.6%

WACC

5AB.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.38	0.61

Additional risk adjustments	0.5%	1.0%
Cost of equity	5.20%	7.90%

Tax rate	0.30%	2.10%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.00%	7.90%

After-tax WACC	5.2%	7.9%


Selected WACC	6.6%

5AB.SI'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 5AB.SI:

cost_of_equity (6.55%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.