U11.SI
United Overseas Bank Ltd
Price:  
37.1 
SGD
Volume:  
2,128,100
Singapore | Banks

U11.SI WACC - Weighted Average Cost of Capital

The WACC of United Overseas Bank Ltd (U11.SI) is 7.5%.

The Cost of Equity of United Overseas Bank Ltd (U11.SI) is 9.85%.
The Cost of Debt of United Overseas Bank Ltd (U11.SI) is 5%.

RangeSelected
Cost of equity8.4% - 11.3%9.85%
Tax rate16.9% - 17.2%17.05%
Cost of debt5.0% - 5.0%5%
WACC6.7% - 8.4%7.5%
WACC

U11.SI WACC calculation

CategoryLowHigh
Long-term bond rate2.7%3.2%
Equity market risk premium5.1%6.1%
Adjusted beta1.111.24
Additional risk adjustments0.0%0.5%
Cost of equity8.4%11.3%
Tax rate16.9%17.2%
Debt/Equity ratio
0.690.69
Cost of debt5.0%5.0%
After-tax WACC6.7%8.4%
Selected WACC7.5%

U11.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 U11.SI:

cost_of_equity (9.85%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.11) + 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.