UPP.DB
Union Properties PJSC
Price:  
0.74 
AED
Volume:  
23,881,424.00
United Arab Emirates | Real Estate Management & Development
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UPP.DB WACC - Weighted Average Cost of Capital

The WACC of Union Properties PJSC (UPP.DB) is 8.9%.

The Cost of Equity of Union Properties PJSC (UPP.DB) is 9.20%.
The Cost of Debt of Union Properties PJSC (UPP.DB) is 15.30%.

Range Selected
Cost of equity 8.40% - 10.00% 9.20%
Tax rate 33.00% - 55.00% 44.00%
Cost of debt 4.70% - 25.90% 15.30%
WACC 7.5% - 10.3% 8.9%
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 0.42 0.46
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.40% 10.00%
Tax rate 33.00% 55.00%
Debt/Equity ratio 0.21 0.21
Cost of debt 4.70% 25.90%
After-tax WACC 7.5% 10.3%
Selected WACC 8.9%

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 (9.20%) = risk_free_rate (6.15%) + equity_risk_premium (6.30%) * adjusted_beta (0.42) + 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.