L03.SI WACC - Weighted Average Cost of Capital

The WACC of Lian Beng Group Ltd (L03.SI) is 4.4%.

The Cost of Equity of Lian Beng Group Ltd (L03.SI) is 5.10%.

The Cost of Debt of Lian Beng Group Ltd (L03.SI) is 4.95%.

	Range	Selected
Cost of equity	4.00% - 6.20%	5.10%
Tax rate	15.90% - 17.80%	16.85%
Cost of debt	4.00% - 5.90%	4.95%
WACC	3.5% - 5.2%	4.4%

WACC

L03.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.24	0.4

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.00%	6.20%

Tax rate	15.90%	17.80%
Debt/Equity ratio	2.29	2.29
Cost of debt	4.00%	5.90%

After-tax WACC	3.5%	5.2%


Selected WACC	4.4%

L03.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 L03.SI:

cost_of_equity (5.10%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.24) + 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.