BNE.SI WACC - Weighted Average Cost of Capital

The WACC of Kencana Agri Ltd (BNE.SI) is 5.5%.

The Cost of Equity of Kencana Agri Ltd (BNE.SI) is 21.55%.

The Cost of Debt of Kencana Agri Ltd (BNE.SI) is 6.95%.

	Range	Selected
Cost of equity	14.90% - 28.20%	21.55%
Tax rate	41.40% - 47.00%	44.20%
Cost of debt	6.30% - 7.60%	6.95%
WACC	4.8% - 6.3%	5.5%

WACC

BNE.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	2.39	4.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.90%	28.20%

Tax rate	41.40%	47.00%
Debt/Equity ratio	9.6	9.6
Cost of debt	6.30%	7.60%

After-tax WACC	4.8%	6.3%


Selected WACC	5.5%

BNE.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 BNE.SI:

cost_of_equity (21.55%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (2.39) + 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.