S56.SI WACC - Weighted Average Cost of Capital

The WACC of Samudera Shipping Line Ltd (S56.SI) is 6.5%.

The Cost of Equity of Samudera Shipping Line Ltd (S56.SI) is 8.40%.

The Cost of Debt of Samudera Shipping Line Ltd (S56.SI) is 4.30%.

	Range	Selected
Cost of equity	6.60% - 10.20%	8.40%
Tax rate	2.60% - 4.30%	3.45%
Cost of debt	4.00% - 4.60%	4.30%
WACC	5.4% - 7.6%	6.5%

WACC

S56.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.77	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	10.20%

Tax rate	2.60%	4.30%
Debt/Equity ratio	0.81	0.81
Cost of debt	4.00%	4.60%

After-tax WACC	5.4%	7.6%


Selected WACC	6.5%

S56.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 S56.SI:

cost_of_equity (8.40%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.77) + 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.