The WACC of Singapore Medical Group Ltd (5OT.SI) is 7.1%.
Range | Selected | |
Cost of equity | 5.4% - 9.3% | 7.35% |
Tax rate | 11.2% - 13.3% | 12.25% |
Cost of debt | 4.0% - 4.7% | 4.35% |
WACC | 5.2% - 9.0% | 7.1% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.52 | 0.92 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 9.3% |
Tax rate | 11.2% | 13.3% |
Debt/Equity ratio | 0.07 | 0.07 |
Cost of debt | 4.0% | 4.7% |
After-tax WACC | 5.2% | 9.0% |
Selected WACC | 7.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
5OT.SI | Singapore Medical Group Ltd | 0.07 | 0.96 | 0.9 |
1D8.SI | Singapore O&G Ltd | 0.02 | 1.06 | 1.04 |
1H3.SI | Clearbridge Health Ltd | 0.63 | -0.55 | -0.36 |
5NG.SI | Healthway Medical Corporation Ltd | 0.1 | -0.64 | -0.59 |
6077.T | N Field Co Ltd | 0 | 1.65 | 1.65 |
8357.HK | Republic Healthcare Ltd | 0.05 | 0.22 | 0.21 |
8437.HK | RMH Holdings Ltd | 2.56 | 0.98 | 0.3 |
HLA.AX | Healthia Ltd | 0.64 | 1.36 | 0.87 |
P8A.SI | Cordlife Group Ltd | 0.03 | 0.18 | 0.17 |
QC7.SI | Q & M Dental Group (Singapore) Ltd | 0.28 | 1.01 | 0.81 |
Low | High | |
Unlevered beta | 0.27 | 0.83 |
Relevered beta | 0.28 | 0.88 |
Adjusted relevered beta | 0.52 | 0.92 |
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 5OT.SI:
cost_of_equity (7.35%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.52) + 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.