The WACC of Aspial Corporation Ltd (A30.SI) is 4.1%.
| Range | Selected | |
| Cost of equity | 5.30% - 7.80% | 6.55% |
| Tax rate | 19.50% - 39.10% | 29.30% |
| Cost of debt | 4.20% - 6.30% | 5.25% |
| WACC | 3.7% - 4.6% | 4.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.5 | 0.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.30% | 7.80% |
| Tax rate | 19.50% | 39.10% |
| Debt/Equity ratio | 4.56 | 4.56 |
| Cost of debt | 4.20% | 6.30% |
| After-tax WACC | 3.7% | 4.6% |
| Selected WACC | 4.1% | |
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 A30.SI:
cost_of_equity (6.55%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.5) + 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.