The WACC of Ying Li International Real Estate Ltd (5DM.SI) is 11.0%.
| Range | Selected | |
| Cost of equity | 4.60% - 6.60% | 5.60% |
| Tax rate | 9.00% - 15.90% | 12.45% |
| Cost of debt | 4.90% - 22.70% | 13.80% |
| WACC | 4.5% - 17.5% | 11.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.18 | 0.31 |
| Additional risk adjustments | 1.0% | 1.5% |
| Cost of equity | 4.60% | 6.60% |
| Tax rate | 9.00% | 15.90% |
| Debt/Equity ratio | 6.82 | 6.82 |
| Cost of debt | 4.90% | 22.70% |
| After-tax WACC | 4.5% | 17.5% |
| Selected WACC | 11.0% | |
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 5DM.SI:
cost_of_equity (5.60%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.18) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.