The WACC of Sevak Ltd (BAI.SI) is 5.8%.
Range | Selected | |
Cost of equity | 4.5% - 7.1% | 5.8% |
Tax rate | 13.5% - 30.0% | 21.75% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.5% - 7.0% | 5.8% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.35 | 0.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.5% | 7.1% |
Tax rate | 13.5% | 30.0% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.5% | 7.0% |
Selected WACC | 5.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BAI.SI | Sevak Ltd | 0.02 | -1.19 | -1.17 |
8337.HK | Directel Holdings Ltd | 0.02 | -0.65 | -0.65 |
9419.T | WirelessGate Inc | 0.11 | 0.76 | 0.69 |
9424.T | Japan Communications Inc | 0.08 | 1 | 0.93 |
CC3.SI | StarHub Ltd | 0.62 | 0.27 | 0.18 |
M3TECH.KL | M3 Technologies (Asia) Bhd | 0.05 | 1.97 | 1.9 |
RCOM.NS | Reliance Communications Ltd | 143.32 | 0.04 | 0 |
TTML.NS | Tata Teleservices (Maharashtra) Ltd | 1.59 | 1.27 | 0.54 |
VTL.NZ | Vital Ltd | 1.77 | 0.13 | 0.05 |
XOX.KL | XOX Bhd | 0.66 | -1.43 | -0.92 |
Low | High | |
Unlevered beta | 0.03 | 0.32 |
Relevered beta | 0.03 | 0.33 |
Adjusted relevered beta | 0.35 | 0.55 |
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 BAI.SI:
cost_of_equity (5.80%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.