RLCO.TA WACC - Weighted Average Cost of Capital

The WACC of Ralco Agencies Ltd (RLCO.TA) is 10.3%.

The Cost of Equity of Ralco Agencies Ltd (RLCO.TA) is 10.90%.

The Cost of Debt of Ralco Agencies Ltd (RLCO.TA) is 5.00%.

	Range	Selected
Cost of equity	9.70% - 12.10%	10.90%
Tax rate	22.90% - 23.10%	23.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.2% - 11.5%	10.3%

WACC

RLCO.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.79	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.10%

Tax rate	22.90%	23.10%
Debt/Equity ratio	0.08	0.08
Cost of debt	5.00%	5.00%

After-tax WACC	9.2%	11.5%


Selected WACC	10.3%

RLCO.TA'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 RLCO.TA:

cost_of_equity (10.90%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.79) + 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.