The WACC of Synergetic Auto Performance PCL (ASAP.BK) is 11.9%.
| Range | Selected | |
| Cost of equity | 21.40% - 37.70% | 29.55% |
| Tax rate | 0.60% - 1.40% | 1.00% |
| Cost of debt | 4.00% - 14.30% | 9.15% |
| WACC | 6.4% - 17.4% | 11.9% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 2.53 | 4.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.40% | 37.70% |
| Tax rate | 0.60% | 1.40% |
| Debt/Equity ratio | 6.12 | 6.12 |
| Cost of debt | 4.00% | 14.30% |
| After-tax WACC | 6.4% | 17.4% |
| Selected WACC | 11.9% | |
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 ASAP.BK:
cost_of_equity (29.55%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (2.53) + 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.