SHR.BK WACC - Weighted Average Cost of Capital

The WACC of S Hotels and Resorts PCL (SHR.BK) is 7.2%.

The Cost of Equity of S Hotels and Resorts PCL (SHR.BK) is 11.75%.

The Cost of Debt of S Hotels and Resorts PCL (SHR.BK) is 7.30%.

	Range	Selected
Cost of equity	8.90% - 14.60%	11.75%
Tax rate	15.60% - 30.70%	23.15%
Cost of debt	6.80% - 7.80%	7.30%
WACC	6.6% - 7.9%	7.2%

WACC

SHR.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.85	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	14.60%

Tax rate	15.60%	30.70%
Debt/Equity ratio	2.75	2.75
Cost of debt	6.80%	7.80%

After-tax WACC	6.6%	7.9%


Selected WACC	7.2%

SHR.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 SHR.BK:

cost_of_equity (11.75%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * 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.