ACE.BK WACC - Weighted Average Cost of Capital

The WACC of Absolute Clean Energy PCL (ACE.BK) is 8.7%.

The Cost of Equity of Absolute Clean Energy PCL (ACE.BK) is 11.45%.

The Cost of Debt of Absolute Clean Energy PCL (ACE.BK) is 4.25%.

	Range	Selected
Cost of equity	9.50% - 13.40%	11.45%
Tax rate	6.00% - 6.50%	6.25%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.4% - 10.0%	8.7%

WACC

ACE.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.94	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	13.40%

Tax rate	6.00%	6.50%
Debt/Equity ratio	0.6	0.6
Cost of debt	4.00%	4.50%

After-tax WACC	7.4%	10.0%


Selected WACC	8.7%

ACE.BK'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 ACE.BK:

cost_of_equity (11.45%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.94) + 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.