FRHC WACC - Weighted Average Cost of Capital

The WACC of Freedom Holding Corp (FRHC) is 8.7%.

The Cost of Equity of Freedom Holding Corp (FRHC) is 7.50%.

The Cost of Debt of Freedom Holding Corp (FRHC) is 17.90%.

	Range	Selected
Cost of equity	6.10% - 8.90%	7.50%
Tax rate	16.40% - 21.70%	19.05%
Cost of debt	12.40% - 23.40%	17.90%
WACC	6.9% - 10.6%	8.7%

WACC

FRHC WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.5	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.90%

Tax rate	16.40%	21.70%
Debt/Equity ratio	0.21	0.21
Cost of debt	12.40%	23.40%

After-tax WACC	6.9%	10.6%


Selected WACC	8.7%

FRHC'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 FRHC:

cost_of_equity (7.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.5) + 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.