5G2.SI WACC - Weighted Average Cost of Capital

The WACC of Kim Heng Offshore & Marine Holdings Ltd (5G2.SI) is 5.3%.

The Cost of Equity of Kim Heng Offshore & Marine Holdings Ltd (5G2.SI) is 7.40%.

The Cost of Debt of Kim Heng Offshore & Marine Holdings Ltd (5G2.SI) is 6.30%.

	Range	Selected
Cost of equity	6.10% - 8.70%	7.40%
Tax rate	37.20% - 43.80%	40.50%
Cost of debt	5.60% - 7.00%	6.30%
WACC	4.6% - 6.0%	5.3%

WACC

5G2.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.66	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	8.70%

Tax rate	37.20%	43.80%
Debt/Equity ratio	1.26	1.26
Cost of debt	5.60%	7.00%

After-tax WACC	4.6%	6.0%


Selected WACC	5.3%

5G2.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 5G2.SI:

cost_of_equity (7.40%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.