RQ1.SI WACC - Weighted Average Cost of Capital
The WACC of Overseas Education Ltd (RQ1.SI) is 6.2%.
| Range | Selected | |
| Cost of equity | 7.4% - 10.9% | 9.15% |
| Tax rate | 22.1% - 24.1% | 23.1% |
| Cost of debt | 4.0% - 4.9% | 4.45% |
| WACC | 5.2% - 7.2% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.92 | 1.18 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 10.9% |
| Tax rate | 22.1% | 24.1% |
| Debt/Equity ratio | 1.09 | 1.09 |
| Cost of debt | 4.0% | 4.9% |
| After-tax WACC | 5.2% | 7.2% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RQ1.SI | Overseas Education Ltd | 1.09 | 0.59 | 0.32 |
| 057030.KQ | YBM Net Inc | 0.15 | 0.65 | 0.58 |
| 133750.KQ | MegaMD Co Ltd | 0.09 | 0.63 | 0.59 |
| 1758.HK | Bojun Education Company Ltd | 11.62 | -0.32 | -0.03 |
| 9760.T | Shingakukai Holdings Co Ltd | 2.07 | 0.64 | 0.25 |
| APTECHT.NS | Aptech Ltd | 0.01 | 1.45 | 1.44 |
| BOU.SI | Informatics Education Ltd | 0.11 | 0.9 | 0.83 |
| CLEDUCATE.NS | CL Educate Ltd | 0.06 | 1.66 | 1.58 |
| NR7.SI | Raffles Education Corporation Ltd | 3.97 | 0.43 | 0.11 |
| RDH.AX | Redhill Education Ltd | 0.34 | 1.22 | 0.96 |
| Low | High | |
| Unlevered beta | 0.48 | 0.69 |
| Relevered beta | 0.88 | 1.27 |
| Adjusted relevered beta | 0.92 | 1.18 |
RQ1.SI'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 RQ1.SI:
cost_of_equity (9.15%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.92) + 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.