RSP.BK WACC - Weighted Average Cost of Capital

The WACC of Rich Sport PCL (RSP.BK) is 12.6%.

The Cost of Equity of Rich Sport PCL (RSP.BK) is 9.00%.

The Cost of Debt of Rich Sport PCL (RSP.BK) is 29.10%.

	Range	Selected
Cost of equity	7.60% - 10.40%	9.00%
Tax rate	20.10% - 22.40%	21.25%
Cost of debt	4.30% - 53.90%	29.10%
WACC	6.6% - 18.5%	12.6%

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	0.68	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	10.40%

Tax rate	20.10%	22.40%
Debt/Equity ratio	0.35	0.35
Cost of debt	4.30%	53.90%

After-tax WACC	6.6%	18.5%


Selected WACC	12.6%

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 (9.00%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.68) + 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.