The WACC of Indofood Agri Resources Ltd (5JS.SI) is 5.2%.
Range | Selected | |
Cost of equity | 6.8% - 9.9% | 8.35% |
Tax rate | 39.8% - 41.7% | 40.75% |
Cost of debt | 4.0% - 5.9% | 4.95% |
WACC | 4.3% - 6.2% | 5.2% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.81 | 1.01 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 9.9% |
Tax rate | 39.8% | 41.7% |
Debt/Equity ratio | 1.36 | 1.36 |
Cost of debt | 4.0% | 5.9% |
After-tax WACC | 4.3% | 6.2% |
Selected WACC | 5.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
5JS.SI | Indofood Agri Resources Ltd | 1.36 | 0.11 | 0.06 |
1767.HK | TS Wonders Holding Ltd | 0.02 | 0.41 | 0.41 |
42W.SI | China Star Food Group Ltd | 0.27 | 0.03 | 0.02 |
5EG.SI | Zhongxin Fruit and Juice Ltd | 0.42 | 0.11 | 0.09 |
AZR.SI | United Food Holdings Ltd | 0.22 | 0.94 | 0.83 |
F03.SI | Food Empire Holdings Ltd | 0.1 | 0.71 | 0.67 |
P34.SI | Delfi Ltd | 0.09 | 0.51 | 0.49 |
VLF.VN | Vinh Long Cereal and Food Corp | 2.81 | 1.88 | 0.71 |
XO.BK | Exotic Food PCL | 0.01 | 1.02 | 1.02 |
Y03.SI | Yeo Hiap Seng Ltd | 0.05 | 0.38 | 0.37 |
Low | High | |
Unlevered beta | 0.39 | 0.56 |
Relevered beta | 0.72 | 1.01 |
Adjusted relevered beta | 0.81 | 1.01 |
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 5JS.SI:
cost_of_equity (8.35%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.81) + 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.