MRG.WA WACC - Weighted Average Cost of Capital

The WACC of Merlin Group SA (MRG.WA) is 8.0%.

The Cost of Equity of Merlin Group SA (MRG.WA) is 8.15%.

The Cost of Debt of Merlin Group SA (MRG.WA) is 4.90%.

	Range	Selected
Cost of equity	7.30% - 9.00%	8.15%
Tax rate	0.50% - 0.80%	0.65%
Cost of debt	4.90% - 4.90%	4.90%
WACC	7.2% - 8.8%	8.0%

WACC

MRG.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.29	0.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.30%	9.00%

Tax rate	0.50%	0.80%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.90%	4.90%

After-tax WACC	7.2%	8.8%


Selected WACC	8.0%

MRG.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 MRG.WA:

cost_of_equity (8.15%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.29) + 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.