SMT.TA WACC - Weighted Average Cost of Capital

The WACC of Summit Real Estate Holdings Ltd (SMT.TA) is 10.0%.

The Cost of Equity of Summit Real Estate Holdings Ltd (SMT.TA) is 12.05%.

The Cost of Debt of Summit Real Estate Holdings Ltd (SMT.TA) is 10.30%.

	Range	Selected
Cost of equity	10.90% - 13.20%	12.05%
Tax rate	18.00% - 19.90%	18.95%
Cost of debt	4.00% - 16.60%	10.30%
WACC	6.7% - 13.3%	10.0%

WACC

SMT.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.99	1.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	13.20%

Tax rate	18.00%	19.90%
Debt/Equity ratio	1.26	1.26
Cost of debt	4.00%	16.60%

After-tax WACC	6.7%	13.3%


Selected WACC	10.0%

SMT.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 SMT.TA:

cost_of_equity (12.05%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.99) + 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.