BHK.SI WACC - Weighted Average Cost of Capital

The WACC of SIIC Environment Holdings Ltd (BHK.SI) is 5.2%.

The Cost of Equity of SIIC Environment Holdings Ltd (BHK.SI) is 16.65%.

The Cost of Debt of SIIC Environment Holdings Ltd (BHK.SI) is 5.30%.

	Range	Selected
Cost of equity	6.90% - 26.40%	16.65%
Tax rate	23.70% - 24.70%	24.20%
Cost of debt	4.30% - 6.30%	5.30%
WACC	3.6% - 6.8%	5.2%

WACC

BHK.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.82	3.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	26.40%

Tax rate	23.70%	24.70%
Debt/Equity ratio	9.65	9.65
Cost of debt	4.30%	6.30%

After-tax WACC	3.6%	6.8%


Selected WACC	5.2%

BHK.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 BHK.SI:

cost_of_equity (16.65%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.82) + 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.