O9E.SI WACC - Weighted Average Cost of Capital

The WACC of Parkson Retail Asia Ltd (O9E.SI) is 5.3%.

The Cost of Equity of Parkson Retail Asia Ltd (O9E.SI) is 8.35%.

The Cost of Debt of Parkson Retail Asia Ltd (O9E.SI) is 5.90%.

	Range	Selected
Cost of equity	6.50% - 10.20%	8.35%
Tax rate	30.20% - 32.20%	31.20%
Cost of debt	4.20% - 7.60%	5.90%
WACC	4.0% - 6.6%	5.3%

WACC

O9E.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.75	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	10.20%

Tax rate	30.20%	32.20%
Debt/Equity ratio	2.39	2.39
Cost of debt	4.20%	7.60%

After-tax WACC	4.0%	6.6%


Selected WACC	5.3%

O9E.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 O9E.SI:

cost_of_equity (8.35%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.