The WACC of ES Group (Holdings) Ltd (5RC.SI) is 8.6%.
| Range | Selected | |
| Cost of equity | 8.30% - 13.60% | 10.95% |
| Tax rate | 1.60% - 3.60% | 2.60% |
| Cost of debt | 6.40% - 7.00% | 6.70% |
| WACC | 7.2% - 9.9% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.09 | 1.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.30% | 13.60% |
| Tax rate | 1.60% | 3.60% |
| Debt/Equity ratio | 1.17 | 1.17 |
| Cost of debt | 6.40% | 7.00% |
| After-tax WACC | 7.2% | 9.9% |
| Selected WACC | 8.6% | |
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 5RC.SI:
cost_of_equity (10.95%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.09) + 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.