BFI.SI WACC - Weighted Average Cost of Capital

The WACC of Tiong Seng Holdings Ltd (BFI.SI) is 9.8%.

The Cost of Equity of Tiong Seng Holdings Ltd (BFI.SI) is 5.25%.

The Cost of Debt of Tiong Seng Holdings Ltd (BFI.SI) is 12.15%.

	Range	Selected
Cost of equity	3.50% - 7.00%	5.25%
Tax rate	2.70% - 3.90%	3.30%
Cost of debt	4.60% - 19.70%	12.15%
WACC	4.2% - 15.5%	9.8%

WACC

BFI.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.15	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	3.50%	7.00%

Tax rate	2.70%	3.90%
Debt/Equity ratio	2.48	2.48
Cost of debt	4.60%	19.70%

After-tax WACC	4.2%	15.5%


Selected WACC	9.8%

BFI.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 BFI.SI:

cost_of_equity (5.25%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.15) + 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.