T12.SI WACC - Weighted Average Cost of Capital

The WACC of Tat Seng Packaging Group Ltd (T12.SI) is 6.4%.

The Cost of Equity of Tat Seng Packaging Group Ltd (T12.SI) is 7.20%.

The Cost of Debt of Tat Seng Packaging Group Ltd (T12.SI) is 4.25%.

	Range	Selected
Cost of equity	5.90% - 8.50%	7.20%
Tax rate	17.20% - 18.10%	17.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.4% - 7.4%	6.4%

WACC

T12.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.63	0.78

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	8.50%

Tax rate	17.20%	18.10%
Debt/Equity ratio	0.27	0.27
Cost of debt	4.00%	4.50%

After-tax WACC	5.4%	7.4%


Selected WACC	6.4%

T12.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 T12.SI:

cost_of_equity (7.20%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.63) + 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.