HMN.SI WACC - Weighted Average Cost of Capital

The WACC of Ascott Residence Trust (HMN.SI) is 5.9%.

The Cost of Equity of Ascott Residence Trust (HMN.SI) is 7.70%.

The Cost of Debt of Ascott Residence Trust (HMN.SI) is 4.95%.

	Range	Selected
Cost of equity	6.30% - 9.10%	7.70%
Tax rate	15.80% - 16.40%	16.10%
Cost of debt	4.00% - 5.90%	4.95%
WACC	4.8% - 6.9%	5.9%

WACC

HMN.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.69	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.10%

Tax rate	15.80%	16.40%
Debt/Equity ratio	1.04	1.04
Cost of debt	4.00%	5.90%

After-tax WACC	4.8%	6.9%


Selected WACC	5.9%

HMN.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 HMN.SI:

cost_of_equity (7.70%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.69) + 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.