R22.WA WACC - Weighted Average Cost of Capital

The WACC of R22 SA (R22.WA) is 9.7%.

The Cost of Equity of R22 SA (R22.WA) is 11.05%.

The Cost of Debt of R22 SA (R22.WA) is 7.15%.

	Range	Selected
Cost of equity	10.10% - 12.00%	11.05%
Tax rate	19.20% - 20.40%	19.80%
Cost of debt	6.50% - 7.80%	7.15%
WACC	8.9% - 10.6%	9.7%

WACC

R22.WA WACC calculation

Category	Low	High

Long-term bond rate	5.6%	6.1%
Equity market risk premium	6.8%	7.8%
Adjusted beta	0.66	0.7

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	12.00%

Tax rate	19.20%	20.40%
Debt/Equity ratio	0.33	0.33
Cost of debt	6.50%	7.80%

After-tax WACC	8.9%	10.6%


Selected WACC	9.7%

R22.WA'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 R22.WA:

cost_of_equity (11.05%) = risk_free_rate (5.85%) + equity_risk_premium (7.30%) * adjusted_beta (0.66) + 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.