MLS.WA WACC - Weighted Average Cost of Capital

The WACC of ML System SA (MLS.WA) is 7.9%.

The Cost of Equity of ML System SA (MLS.WA) is 10.40%.

The Cost of Debt of ML System SA (MLS.WA) is 6.30%.

	Range	Selected
Cost of equity	8.20% - 12.60%	10.40%
Tax rate	3.30% - 20.50%	11.90%
Cost of debt	5.60% - 7.00%	6.30%
WACC	6.7% - 9.0%	7.9%

WACC

MLS.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.42	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	12.60%

Tax rate	3.30%	20.50%
Debt/Equity ratio	1.05	1.05
Cost of debt	5.60%	7.00%

After-tax WACC	6.7%	9.0%


Selected WACC	7.9%

MLS.WA'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 MLS.WA:

cost_of_equity (10.40%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.42) + 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.