M05.SI WACC - Weighted Average Cost of Capital

The WACC of MTQ Corporation Ltd (M05.SI) is 6.4%.

The Cost of Equity of MTQ Corporation Ltd (M05.SI) is 7.85%.

The Cost of Debt of MTQ Corporation Ltd (M05.SI) is 4.25%.

	Range	Selected
Cost of equity	6.30% - 9.40%	7.85%
Tax rate	6.70% - 8.90%	7.80%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.3% - 7.5%	6.4%

WACC

M05.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.7	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.30%	9.40%

Tax rate	6.70%	8.90%
Debt/Equity ratio	0.59	0.59
Cost of debt	4.00%	4.50%

After-tax WACC	5.3%	7.5%


Selected WACC	6.4%

M05.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 M05.SI:

cost_of_equity (7.85%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.7) + 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.