RSEL.TA WACC - Weighted Average Cost of Capital

The WACC of RSL Electronics Ltd (RSEL.TA) is 11.5%.

The Cost of Equity of RSL Electronics Ltd (RSEL.TA) is 11.55%.

The Cost of Debt of RSL Electronics Ltd (RSEL.TA) is 4.25%.

	Range	Selected
Cost of equity	10.00% - 13.10%	11.55%
Tax rate	8.30% - 8.80%	8.55%
Cost of debt	4.00% - 4.50%	4.25%
WACC	10.0% - 13.0%	11.5%

WACC

RSEL.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.85	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.00%	13.10%

Tax rate	8.30%	8.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	4.00%	4.50%

After-tax WACC	10.0%	13.0%


Selected WACC	11.5%

RSEL.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 RSEL.TA:

cost_of_equity (11.55%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.85) + 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.