The WACC of Golden House Ltd (GOHO.TA) is 7.3%.
| Range | Selected | |
| Cost of equity | 7.60% - 9.50% | 8.55% |
| Tax rate | 21.10% - 48.00% | 34.55% |
| Cost of debt | 4.00% - 13.30% | 8.65% |
| WACC | 6.0% - 8.6% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 4.8% | 5.3% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.45 | 0.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.60% | 9.50% |
| Tax rate | 21.10% | 48.00% |
| Debt/Equity ratio | 0.58 | 0.58 |
| Cost of debt | 4.00% | 13.30% |
| After-tax WACC | 6.0% | 8.6% |
| Selected WACC | 7.3% | |
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 GOHO.TA:
cost_of_equity (8.55%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.45) + 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.