The WACC of Oxley Holdings Ltd (5UX.SI) is 10.9%.
| Range | Selected | |
| Cost of equity | 5.20% - 8.30% | 6.75% |
| Tax rate | 9.10% - 12.70% | 10.90% |
| Cost of debt | 4.30% - 22.70% | 13.50% |
| WACC | 4.2% - 17.6% | 10.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.49 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.20% | 8.30% |
| Tax rate | 9.10% | 12.70% |
| Debt/Equity ratio | 4.14 | 4.14 |
| Cost of debt | 4.30% | 22.70% |
| After-tax WACC | 4.2% | 17.6% |
| Selected WACC | 10.9% | |
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 5UX.SI:
cost_of_equity (6.75%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + 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.