ACV.SI WACC - Weighted Average Cost of Capital
The WACC of Frasers Hospitality Trust (ACV.SI) is 6.3%.
| Range | Selected | |
| Cost of equity | 6.3% - 9.0% | 7.65% |
| Tax rate | 13.3% - 22.8% | 18.05% |
| Cost of debt | 4.0% - 5.9% | 4.95% |
| WACC | 5.3% - 7.4% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.7 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 9.0% |
| Tax rate | 13.3% | 22.8% |
| Debt/Equity ratio | 0.56 | 0.56 |
| Cost of debt | 4.0% | 5.9% |
| After-tax WACC | 5.3% | 7.4% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ACV.SI | Frasers Hospitality Trust | 0.56 | 1.49 | 1.01 |
| 1881.HK | Regal Real Estate Investment Trust | 7.11 | 0.33 | 0.05 |
| 3478.T | Mori Trust Hotel Reit Inc | 0.81 | 1.04 | 0.62 |
| CRPU.SI | Sasseur Real Estate Investment Trust | 0.56 | 0.68 | 0.46 |
| HMN.SI | Ascott Residence Trust | 1.05 | 0.43 | 0.23 |
| J85.SI | CDL Hospitality Trusts | 1.55 | 1.5 | 0.65 |
| K2LU.SI | ARA LOGOS Logistics Trust | 0.78 | 0.82 | 0.5 |
| O5RU.SI | AIMS APAC REIT | 0.67 | 0.42 | 0.27 |
| Q5T.SI | Far East Hospitality Trust | 0.63 | 1.22 | 0.79 |
| UD1U.SI | IREIT Global | 1.49 | 0.25 | 0.11 |
| Low | High | |
| Unlevered beta | 0.38 | 0.54 |
| Relevered beta | 0.55 | 0.81 |
| Adjusted relevered beta | 0.7 | 0.87 |
ACV.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 ACV.SI:
cost_of_equity (7.65%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.7) + 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.