The WACC of Mediacap SA (MCP.WA) is 12.6%.
| Range | Selected | |
| Cost of equity | 13.00% - 16.30% | 14.65% |
| Tax rate | 21.60% - 22.10% | 21.85% |
| Cost of debt | 7.90% - 7.90% | 7.90% |
| WACC | 11.3% - 13.9% | 12.6% |
| Category | Low | High |
| Long-term bond rate | 7.2% | 7.7% |
| Equity market risk premium | 5.6% | 6.6% |
| Adjusted beta | 1.03 | 1.23 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.00% | 16.30% |
| Tax rate | 21.60% | 22.10% |
| Debt/Equity ratio | 0.32 | 0.32 |
| Cost of debt | 7.90% | 7.90% |
| After-tax WACC | 11.3% | 13.9% |
| Selected WACC | 12.6% | |
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 MCP.WA:
cost_of_equity (14.65%) = risk_free_rate (7.45%) + equity_risk_premium (6.10%) * adjusted_beta (1.03) + 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.