The WACC of Halcyon Agri Corporation Ltd (5VJ.SI) is 7.9%.
| Range | Selected | |
| Cost of equity | 5.80% - 10.80% | 8.30% |
| Tax rate | 17.00% - 17.00% | 17.00% |
| Cost of debt | 4.30% - 14.50% | 9.40% |
| WACC | 4.2% - 11.7% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.61 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.80% | 10.80% |
| Tax rate | 17.00% | 17.00% |
| Debt/Equity ratio | 2.48 | 2.48 |
| Cost of debt | 4.30% | 14.50% |
| After-tax WACC | 4.2% | 11.7% |
| Selected WACC | 7.9% | |
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 5VJ.SI:
cost_of_equity (8.30%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.61) + 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.