OV8.SI WACC - Weighted Average Cost of Capital
The WACC of Sheng Siong Group Ltd (OV8.SI) is 6.7%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.9% | 6.8% |
| Tax rate | 17.6% - 17.9% | 17.75% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.6% - 7.8% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.59 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.9% |
| Tax rate | 17.6% | 17.9% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.6% | 7.8% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OV8.SI | Sheng Siong Group Ltd | 0.04 | 0.15 | 0.15 |
| 002336.SZ | Renrenle Commercial Group Co Ltd | 5.14 | 1 | 0.19 |
| 002697.SZ | Chengdu Hongqi Chain Co Ltd | 0.12 | 1.08 | 0.98 |
| 2742.T | Halows Co Ltd | 0.11 | 0.59 | 0.55 |
| 3539.T | JM Holdings Co Ltd | 0.14 | 0.31 | 0.27 |
| 7508.T | G-7 Holdings Inc | 0.24 | 0.7 | 0.58 |
| 7520.T | Eco's Co Ltd | 0.44 | 0.69 | 0.5 |
| 9823.T | Mammy Mart Corp | 0.24 | 0.51 | 0.42 |
| 9919.T | Kansai Super Market Ltd | 0.13 | 0.35 | 0.32 |
| MIDI.JK | Midi Utama Indonesia Tbk PT | 0.05 | 0.71 | 0.68 |
| Low | High | |
| Unlevered beta | 0.38 | 0.52 |
| Relevered beta | 0.39 | 0.54 |
| Adjusted relevered beta | 0.59 | 0.69 |
OV8.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 OV8.SI:
cost_of_equity (6.80%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.59) + 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.