DU4.SI WACC - Weighted Average Cost of Capital

The WACC of Mermaid Maritime PCL (DU4.SI) is 8.9%.

The Cost of Equity of Mermaid Maritime PCL (DU4.SI) is 8.65%.

The Cost of Debt of Mermaid Maritime PCL (DU4.SI) is 10.75%.

	Range	Selected
Cost of equity	6.80% - 10.50%	8.65%
Tax rate	11.80% - 13.60%	12.70%
Cost of debt	7.00% - 14.50%	10.75%
WACC	6.6% - 11.3%	8.9%

WACC

DU4.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.81	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.80%	10.50%

Tax rate	11.80%	13.60%
Debt/Equity ratio	0.64	0.64
Cost of debt	7.00%	14.50%

After-tax WACC	6.6%	11.3%


Selected WACC	8.9%

DU4.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 DU4.SI:

cost_of_equity (8.65%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.81) + 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.