MLS.WA WACC - Weighted Average Cost of Capital

The WACC of ML System SA (MLS.WA) is 7.2%.

The Cost of Equity of ML System SA (MLS.WA) is 10.25%.

The Cost of Debt of ML System SA (MLS.WA) is 5.70%.

	Range	Selected
Cost of equity	8.30% - 12.20%	10.25%
Tax rate	14.90% - 32.30%	23.60%
Cost of debt	4.40% - 7.00%	5.70%
WACC	5.9% - 8.4%	7.2%

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	0.43	0.77

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	12.20%

Tax rate	14.90%	32.30%
Debt/Equity ratio	1.05	1.05
Cost of debt	4.40%	7.00%

After-tax WACC	5.9%	8.4%


Selected WACC	7.2%

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 (10.25%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.43) + 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.