RSP.BK WACC - Weighted Average Cost of Capital

The WACC of Rich Sport PCL (RSP.BK) is 7.5%.

The Cost of Equity of Rich Sport PCL (RSP.BK) is 9.65%.

The Cost of Debt of Rich Sport PCL (RSP.BK) is 4.85%.

	Range	Selected
Cost of equity	8.30% - 11.00%	9.65%
Tax rate	23.00% - 24.60%	23.80%
Cost of debt	4.80% - 4.90%	4.85%
WACC	6.7% - 8.4%	7.5%

WACC

RSP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.78	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	11.00%

Tax rate	23.00%	24.60%
Debt/Equity ratio	0.55	0.55
Cost of debt	4.80%	4.90%

After-tax WACC	6.7%	8.4%


Selected WACC	7.5%

RSP.BK'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 RSP.BK:

cost_of_equity (9.65%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.78) + 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.