A7RU.SI WACC - Weighted Average Cost of Capital

The WACC of Keppel Infrastructure Trust (A7RU.SI) is 6.0%.

The Cost of Equity of Keppel Infrastructure Trust (A7RU.SI) is 6.50%.

The Cost of Debt of Keppel Infrastructure Trust (A7RU.SI) is 8.30%.

	Range	Selected
Cost of equity	5.30% - 7.70%	6.50%
Tax rate	29.50% - 34.20%	31.85%
Cost of debt	5.40% - 11.20%	8.30%
WACC	4.5% - 7.5%	6.0%

WACC

A7RU.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.51	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	7.70%

Tax rate	29.50%	34.20%
Debt/Equity ratio	1.15	1.15
Cost of debt	5.40%	11.20%

After-tax WACC	4.5%	7.5%


Selected WACC	6.0%

A7RU.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 A7RU.SI:

cost_of_equity (6.50%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.51) + 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.