The WACC of BBR Holdings (S) Ltd (KJ5.SI) is 5.7%.
| Range | Selected | |
| Cost of equity | 10.20% - 14.50% | 12.35% |
| Tax rate | 10.90% - 18.20% | 14.55% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 5.1% - 6.2% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.47 | 1.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.20% | 14.50% |
| Tax rate | 10.90% | 18.20% |
| Debt/Equity ratio | 3.25 | 3.25 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 5.1% | 6.2% |
| Selected WACC | 5.7% | |
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 KJ5.SI:
cost_of_equity (12.35%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.47) + 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.