The WACC of IREIT Global (UD1U.SI) is 5.7%.
Range | Selected | |
Cost of equity | 7.2% - 10.0% | 8.6% |
Tax rate | 14.8% - 16.1% | 15.45% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.0% - 6.4% | 5.7% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.89 | 1.03 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 10.0% |
Tax rate | 14.8% | 16.1% |
Debt/Equity ratio | 1.42 | 1.42 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.0% | 6.4% |
Selected WACC | 5.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
UD1U.SI | IREIT Global | 1.42 | 0.2 | 0.09 |
ACV.SI | Frasers Hospitality Trust | 0.55 | 1.49 | 1.01 |
BTOU.SI | Manulife US Real Estate Investment Trust | 6.37 | 1.36 | 0.21 |
CRPU.SI | Sasseur Real Estate Investment Trust | 0.54 | 0.68 | 0.46 |
GVREIT.BK | Golden Ventures Leasehold Real Estate Investment Trust | 0.51 | 0.63 | 0.44 |
J85.SI | CDL Hospitality Trusts | 1.46 | 1.5 | 0.67 |
K2LU.SI | ARA LOGOS Logistics Trust | 0.78 | 0.82 | 0.5 |
K71U.SI | Keppel REIT | 0.77 | 0.47 | 0.29 |
MXNU.SI | Elite Commercial REIT | 1.16 | 0.5 | 0.25 |
Q5T.SI | Far East Hospitality Trust | 0.62 | 1.22 | 0.8 |
Low | High | |
Unlevered beta | 0.38 | 0.48 |
Relevered beta | 0.84 | 1.04 |
Adjusted relevered beta | 0.89 | 1.03 |
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 UD1U.SI:
cost_of_equity (8.60%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.89) + 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.