The WACC of SingHaiyi Group Ltd (5H0.SI) is 10.0%.
| Range | Selected | |
| Cost of equity | 7.10% - 11.40% | 9.25% |
| Tax rate | 14.30% - 16.00% | 15.15% |
| Cost of debt | 4.00% - 20.40% | 12.20% |
| WACC | 4.4% - 15.6% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.87 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.10% | 11.40% |
| Tax rate | 14.30% | 16.00% |
| Debt/Equity ratio | 2.64 | 2.64 |
| Cost of debt | 4.00% | 20.40% |
| After-tax WACC | 4.4% | 15.6% |
| Selected WACC | 10.0% | |
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 5H0.SI:
cost_of_equity (9.25%) = risk_free_rate (3.15%) + equity_risk_premium (5.20%) * adjusted_beta (0.87) + 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.