UPP.DB WACC - Weighted Average Cost of Capital

The WACC of Union Properties PJSC (UPP.DB) is 9.3%.

The Cost of Equity of Union Properties PJSC (UPP.DB) is 9.85%.

The Cost of Debt of Union Properties PJSC (UPP.DB) is 15.30%.

	Range	Selected
Cost of equity	8.80% - 10.90%	9.85%
Tax rate	33.00% - 55.00%	44.00%
Cost of debt	4.70% - 25.90%	15.30%
WACC	7.6% - 11.0%	9.3%

WACC

UPP.DB WACC calculation

Category	Low	High

Long-term bond rate	5.9%	6.4%
Equity market risk premium	5.8%	6.8%
Adjusted beta	0.5	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	10.90%

Tax rate	33.00%	55.00%
Debt/Equity ratio	0.26	0.26
Cost of debt	4.70%	25.90%

After-tax WACC	7.6%	11.0%


Selected WACC	9.3%

UPP.DB'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 UPP.DB:

cost_of_equity (9.85%) = risk_free_rate (6.15%) + equity_risk_premium (6.30%) * adjusted_beta (0.5) + 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.