EMAAR.DB WACC - Weighted Average Cost of Capital

The WACC of Emaar Properties PJSC (EMAAR.DB) is 11.6%.

The Cost of Equity of Emaar Properties PJSC (EMAAR.DB) is 12.15%.

The Cost of Debt of Emaar Properties PJSC (EMAAR.DB) is 6.55%.

	Range	Selected
Cost of equity	11.00% - 13.30%	12.15%
Tax rate	5.60% - 7.10%	6.35%
Cost of debt	6.50% - 6.60%	6.55%
WACC	10.5% - 12.7%	11.6%

WACC

EMAAR.DB WACC calculation

Category	Low	High

Long-term bond rate	5.9%	6.4%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.87	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.30%

Tax rate	5.60%	7.10%
Debt/Equity ratio	0.1	0.1
Cost of debt	6.50%	6.60%

After-tax WACC	10.5%	12.7%


Selected WACC	11.6%

EMAAR.DB'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 EMAAR.DB:

cost_of_equity (12.15%) = risk_free_rate (6.15%) + equity_risk_premium (6.30%) * adjusted_beta (0.87) + 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.