D01.SI WACC - Weighted Average Cost of Capital

The WACC of Dairy Farm International Holdings Ltd (D01.SI) is 4.3%.

The Cost of Equity of Dairy Farm International Holdings Ltd (D01.SI) is 5.70%.

The Cost of Debt of Dairy Farm International Holdings Ltd (D01.SI) is 4.25%.

	Range	Selected
Cost of equity	4.90% - 6.50%	5.70%
Tax rate	29.80% - 36.50%	33.15%
Cost of debt	4.00% - 4.50%	4.25%
WACC	3.9% - 4.7%	4.3%

WACC

D01.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.47	0.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.90%	6.50%

Tax rate	29.80%	36.50%
Debt/Equity ratio	0.96	0.96
Cost of debt	4.00%	4.50%

After-tax WACC	3.9%	4.7%


Selected WACC	4.3%

D01.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 D01.SI:

cost_of_equity (5.70%) = risk_free_rate (2.95%) + equity_risk_premium (5.10%) * adjusted_beta (0.47) + 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.