QEWS.QA WACC - Weighted Average Cost of Capital

The WACC of Qatar Electricity and Water Company QPSC (QEWS.QA) is 9.5%.

The Cost of Equity of Qatar Electricity and Water Company QPSC (QEWS.QA) is 10.20%.

The Cost of Debt of Qatar Electricity and Water Company QPSC (QEWS.QA) is 7.35%.

	Range	Selected
Cost of equity	8.80% - 11.60%	10.20%
Tax rate	0.10% - 0.20%	0.15%
Cost of debt	4.40% - 10.30%	7.35%
WACC	7.7% - 11.2%	9.5%

WACC

QEWS.QA WACC calculation

Category	Low	High

Long-term bond rate	5.0%	5.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.63	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	11.60%

Tax rate	0.10%	0.20%
Debt/Equity ratio	0.34	0.34
Cost of debt	4.40%	10.30%

After-tax WACC	7.7%	11.2%


Selected WACC	9.5%

QEWS.QA'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 QEWS.QA:

cost_of_equity (10.20%) = risk_free_rate (5.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.63) + 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.