J91U.SI WACC - Weighted Average Cost of Capital

The WACC of ESR-REIT (J91U.SI) is 6.8%.

The Cost of Equity of ESR-REIT (J91U.SI) is 9.90%.

The Cost of Debt of ESR-REIT (J91U.SI) is 5.10%.

	Range	Selected
Cost of equity	8.20% - 11.60%	9.90%
Tax rate	2.70% - 3.40%	3.05%
Cost of debt	4.30% - 5.90%	5.10%
WACC	5.7% - 7.9%	6.8%

WACC

J91U.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.08	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	11.60%

Tax rate	2.70%	3.40%
Debt/Equity ratio	1.61	1.61
Cost of debt	4.30%	5.90%

After-tax WACC	5.7%	7.9%


Selected WACC	6.8%

J91U.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 J91U.SI:

cost_of_equity (9.90%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.08) + 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.