5RE.SI WACC - Weighted Average Cost of Capital

The WACC of Asia Vets Holdings Ltd (5RE.SI) is 5.7%.

The Cost of Equity of Asia Vets Holdings Ltd (5RE.SI) is 5.70%.

The Cost of Debt of Asia Vets Holdings Ltd (5RE.SI) is 5.50%.

	Range	Selected
Cost of equity	4.80% - 6.60%	5.70%
Tax rate	0.90% - 3.40%	2.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.7% - 6.6%	5.7%

WACC

5RE.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.41	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.80%	6.60%

Tax rate	0.90%	3.40%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.00%	7.00%

After-tax WACC	4.7%	6.6%


Selected WACC	5.7%

5RE.SI's CAPM model and how its cost of Equity is calculated

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 5RE.SI:

cost_of_equity (5.70%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.41) + 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.