P36.SI WACC - Weighted Average Cost of Capital

The WACC of Pan Hong Holdings Group Ltd (P36.SI) is 6.9%.

The Cost of Equity of Pan Hong Holdings Group Ltd (P36.SI) is 5.30%.

The Cost of Debt of Pan Hong Holdings Group Ltd (P36.SI) is 18.65%.

	Range	Selected
Cost of equity	4.50% - 6.10%	5.30%
Tax rate	40.00% - 41.20%	40.60%
Cost of debt	4.00% - 33.30%	18.65%
WACC	3.9% - 9.8%	6.9%

WACC

P36.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.35	0.39

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.50%	6.10%

Tax rate	40.00%	41.20%
Debt/Equity ratio	0.38	0.38
Cost of debt	4.00%	33.30%

After-tax WACC	3.9%	9.8%


Selected WACC	6.9%

P36.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 P36.SI:

cost_of_equity (5.30%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.