The WACC of Singapore Press Holdings Ltd (T39.SI) is 8.0%.
| Range | Selected | |
| Cost of equity | 9.70% - 13.50% | 11.60% |
| Tax rate | 13.00% - 13.60% | 13.30% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 6.9% - 9.2% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 1.42 | 1.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.70% | 13.50% |
| Tax rate | 13.00% | 13.60% |
| Debt/Equity ratio | 0.81 | 0.81 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 6.9% | 9.2% |
| Selected WACC | 8.0% | |
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 T39.SI:
cost_of_equity (11.60%) = risk_free_rate (3.15%) + equity_risk_premium (5.20%) * adjusted_beta (1.42) + 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.