SMT.TA WACC - Weighted Average Cost of Capital

The WACC of Summit Real Estate Holdings Ltd (SMT.TA) is 8.6%.

The Cost of Equity of Summit Real Estate Holdings Ltd (SMT.TA) is 11.40%.

The Cost of Debt of Summit Real Estate Holdings Ltd (SMT.TA) is 7.05%.

	Range	Selected
Cost of equity	10.30% - 12.50%	11.40%
Tax rate	12.20% - 18.30%	15.25%
Cost of debt	4.00% - 10.10%	7.05%
WACC	6.8% - 10.3%	8.6%

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	0.9	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	12.50%

Tax rate	12.20%	18.30%
Debt/Equity ratio	1.04	1.04
Cost of debt	4.00%	10.10%

After-tax WACC	6.8%	10.3%


Selected WACC	8.6%

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 (11.40%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.9) + 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.