J36.SI WACC - Weighted Average Cost of Capital

The WACC of Jardine Matheson Holdings Ltd (J36.SI) is 5.1%.

The Cost of Equity of Jardine Matheson Holdings Ltd (J36.SI) is 8.50%.

The Cost of Debt of Jardine Matheson Holdings Ltd (J36.SI) is 4.25%.

	Range	Selected
Cost of equity	6.00% - 11.00%	8.50%
Tax rate	29.30% - 42.40%	35.85%
Cost of debt	4.00% - 4.50%	4.25%
WACC	4.1% - 6.0%	5.1%

WACC

J36.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	4.6%	5.6%
Adjusted beta	0.72	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	11.00%

Tax rate	29.30%	42.40%
Debt/Equity ratio	1.44	1.44
Cost of debt	4.00%	4.50%

After-tax WACC	4.1%	6.0%


Selected WACC	5.1%

J36.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 J36.SI:

cost_of_equity (8.50%) = risk_free_rate (2.95%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.