The WACC of Takween Advanced Industries SJSC (1201.SR) is 10.8%.
| Range | Selected | |
| Cost of equity | 14.90% - 24.30% | 19.60% |
| Tax rate | 0.70% - 1.20% | 0.95% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 8.9% - 12.6% | 10.8% |
| Category | Low | High |
| Long-term bond rate | 5.9% | 6.4% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.47 | 2.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.90% | 24.30% |
| Tax rate | 0.70% | 1.20% |
| Debt/Equity ratio | 1.52 | 1.52 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 8.9% | 12.6% |
| Selected WACC | 10.8% | |
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 1201.SR:
cost_of_equity (19.60%) = risk_free_rate (6.15%) + equity_risk_premium (6.60%) * adjusted_beta (1.47) + 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.