C38U.SI WACC - Weighted Average Cost of Capital

The WACC of CapitaLand Integrated Commercial Trust (C38U.SI) is 5.5%.

The Cost of Equity of CapitaLand Integrated Commercial Trust (C38U.SI) is 6.10%.

The Cost of Debt of CapitaLand Integrated Commercial Trust (C38U.SI) is 4.45%.

	Range	Selected
Cost of equity	5.20% - 7.00%	6.10%
Tax rate	0.60% - 0.90%	0.75%
Cost of debt	4.00% - 4.90%	4.45%
WACC	4.7% - 6.2%	5.5%

WACC

C38U.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.48	0.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	7.00%

Tax rate	0.60%	0.90%
Debt/Equity ratio	0.61	0.61
Cost of debt	4.00%	4.90%

After-tax WACC	4.7%	6.2%


Selected WACC	5.5%

C38U.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 C38U.SI:

cost_of_equity (6.10%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.48) + 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.