DU4.SI WACC - Weighted Average Cost of Capital

The WACC of Mermaid Maritime PCL (DU4.SI) is 5.7%.

The Cost of Equity of Mermaid Maritime PCL (DU4.SI) is 7.80%.

The Cost of Debt of Mermaid Maritime PCL (DU4.SI) is 4.25%.

	Range	Selected
Cost of equity	6.30% - 9.30%	7.80%
Tax rate	10.20% - 13.60%	11.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.9% - 6.6%	5.7%

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	0.71	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.30%

Tax rate	10.20%	13.60%
Debt/Equity ratio	1.02	1.02
Cost of debt	4.00%	4.50%

After-tax WACC	4.9%	6.6%


Selected WACC	5.7%

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 (7.80%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.71) + 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.