DU4.SI WACC - Weighted Average Cost of Capital

The WACC of Mermaid Maritime PCL (DU4.SI) is 8.2%.

The Cost of Equity of Mermaid Maritime PCL (DU4.SI) is 7.30%.

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

	Range	Selected
Cost of equity	5.60% - 9.00%	7.30%
Tax rate	11.80% - 13.60%	12.70%
Cost of debt	7.00% - 14.50%	10.75%
WACC	5.9% - 10.5%	8.2%

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	0.57	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	9.00%

Tax rate	11.80%	13.60%
Debt/Equity ratio	0.74	0.74
Cost of debt	7.00%	14.50%

After-tax WACC	5.9%	10.5%


Selected WACC	8.2%

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 (7.30%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.57) + 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.