FRHC WACC - Weighted Average Cost of Capital

The WACC of Freedom Holding Corp (FRHC) is 9.5%.

The Cost of Equity of Freedom Holding Corp (FRHC) is 8.60%.

The Cost of Debt of Freedom Holding Corp (FRHC) is 14.25%.

	Range	Selected
Cost of equity	7.20% - 10.00%	8.60%
Tax rate	14.80% - 16.50%	15.65%
Cost of debt	9.10% - 19.40%	14.25%
WACC	7.4% - 11.6%	9.5%

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	0.73	0.92

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.00%

Tax rate	14.80%	16.50%
Debt/Equity ratio	0.34	0.34
Cost of debt	9.10%	19.40%

After-tax WACC	7.4%	11.6%


Selected WACC	9.5%

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 (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.