PRH.V WACC - Weighted Average Cost of Capital

The WACC of Pearl River Holdings Ltd (PRH.V) is 11.4%.

The Cost of Equity of Pearl River Holdings Ltd (PRH.V) is 5.60%.

The Cost of Debt of Pearl River Holdings Ltd (PRH.V) is 17.30%.

	Range	Selected
Cost of equity	4.50% - 6.70%	5.60%
Tax rate	8.30% - 18.70%	13.50%
Cost of debt	13.70% - 20.90%	17.30%
WACC	9.6% - 13.2%	11.4%

WACC

PRH.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.12	0.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	4.50%	6.70%

Tax rate	8.30%	18.70%
Debt/Equity ratio	1.71	1.71
Cost of debt	13.70%	20.90%

After-tax WACC	9.6%	13.2%


Selected WACC	11.4%

PRH.V'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 PRH.V:

cost_of_equity (5.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.12) + 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.