5AU.SI WACC - Weighted Average Cost of Capital

The WACC of AP Oil International Ltd (5AU.SI) is 6.2%.

The Cost of Equity of AP Oil International Ltd (5AU.SI) is 6.65%.

The Cost of Debt of AP Oil International Ltd (5AU.SI) is 4.25%.

	Range	Selected
Cost of equity	5.30% - 8.00%	6.65%
Tax rate	9.90% - 12.60%	11.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.0% - 7.3%	6.2%

WACC

5AU.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.51	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.30%	8.00%

Tax rate	9.90%	12.60%
Debt/Equity ratio	0.21	0.21
Cost of debt	4.00%	4.50%

After-tax WACC	5.0%	7.3%


Selected WACC	6.2%

5AU.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 5AU.SI:

cost_of_equity (6.65%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.51) + 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.