BKA.SI WACC - Weighted Average Cost of Capital

The WACC of Sin Heng Heavy Machinery Ltd (BKA.SI) is 7.3%.

The Cost of Equity of Sin Heng Heavy Machinery Ltd (BKA.SI) is 7.55%.

The Cost of Debt of Sin Heng Heavy Machinery Ltd (BKA.SI) is 4.25%.

	Range	Selected
Cost of equity	6.10% - 9.00%	7.55%
Tax rate	17.70% - 19.70%	18.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.9% - 8.6%	7.3%

WACC

BKA.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.67	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	9.00%

Tax rate	17.70%	19.70%
Debt/Equity ratio	0.08	0.08
Cost of debt	4.00%	4.50%

After-tax WACC	5.9%	8.6%


Selected WACC	7.3%

BKA.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 BKA.SI:

cost_of_equity (7.55%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.67) + 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.