The WACC of Ram On Investments and Holdings 1999 Ltd (RMN.TA) is 14.0%.
| Range | Selected | |
| Cost of equity | 8.20% - 10.20% | 9.20% |
| Tax rate | 3.60% - 6.40% | 5.00% |
| Cost of debt | 7.00% - 141.10% | 74.05% |
| WACC | 8.1% - 20.0% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 4.8% | 5.3% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.55 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.20% | 10.20% |
| Tax rate | 3.60% | 6.40% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 7.00% | 141.10% |
| After-tax WACC | 8.1% | 20.0% |
| Selected WACC | 14.0% | |
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 RMN.TA:
cost_of_equity (9.20%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.55) + 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.