8050.SR
Salama Cooperative Insurance Company SJSC
Price:  
13.68 
SAR
Volume:  
86,262
Saudi Arabia | Insurance

8050.SR WACC - Weighted Average Cost of Capital

The WACC of Salama Cooperative Insurance Company SJSC (8050.SR) is 13.8%.

The Cost of Equity of Salama Cooperative Insurance Company SJSC (8050.SR) is 14.25%.
The Cost of Debt of Salama Cooperative Insurance Company SJSC (8050.SR) is 5%.

RangeSelected
Cost of equity12.4% - 16.1%14.25%
Tax rate5.6% - 6.3%5.95%
Cost of debt5.0% - 5.0%5%
WACC12.1% - 15.6%13.8%
WACC

8050.SR WACC calculation

CategoryLowHigh
Long-term bond rate5.9%6.4%
Equity market risk premium6.1%7.1%
Adjusted beta1.061.28
Additional risk adjustments0.0%0.5%
Cost of equity12.4%16.1%
Tax rate5.6%6.3%
Debt/Equity ratio
0.050.05
Cost of debt5.0%5.0%
After-tax WACC12.1%15.6%
Selected WACC13.8%

8050.SR WACC - Detailed calculations of Beta

LowHigh
Unlevered beta1.111.38
Relevered beta1.091.42
Adjusted relevered beta1.061.28

8050.SR'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 8050.SR:

cost_of_equity (14.25%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.