EHG.SI
Econ Healthcare (Asia) Ltd
Price:  
0.35 
SGD
Volume:  
435,800.00
Singapore | N/A
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EHG.SI WACC - Weighted Average Cost of Capital

The WACC of Econ Healthcare (Asia) Ltd (EHG.SI) is 5.3%.

The Cost of Equity of Econ Healthcare (Asia) Ltd (EHG.SI) is 6.10%.
The Cost of Debt of Econ Healthcare (Asia) Ltd (EHG.SI) is 4.25%.

Range Selected
Cost of equity 5.40% - 6.80% 6.10%
Tax rate 16.60% - 20.80% 18.70%
Cost of debt 4.00% - 4.50% 4.25%
WACC 4.8% - 5.8% 5.3%
WACC

EHG.SI WACC calculation

Category Low High
Long-term bond rate 2.7% 3.2%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.42 0.42
Additional risk adjustments 0.5% 1.0%
Cost of equity 5.40% 6.80%
Tax rate 16.60% 20.80%
Debt/Equity ratio 0.43 0.43
Cost of debt 4.00% 4.50%
After-tax WACC 4.8% 5.8%
Selected WACC 5.3%

EHG.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 EHG.SI:

cost_of_equity (6.10%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.42) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.