The WACC of Apex Development PCL (APEX.BK) is 8.0%.
| Range | Selected | |
| Cost of equity | 5.40% - 15.00% | 10.20% |
| Tax rate | 1.60% - 2.70% | 2.15% |
| Cost of debt | 7.00% - 9.20% | 8.10% |
| WACC | 6.9% - 9.1% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.25 | 1.24 |
| Additional risk adjustments | 1.0% | 1.5% |
| Cost of equity | 5.40% | 15.00% |
| Tax rate | 1.60% | 2.70% |
| Debt/Equity ratio | 47.52 | 47.52 |
| Cost of debt | 7.00% | 9.20% |
| After-tax WACC | 6.9% | 9.1% |
| Selected WACC | 8.0% | |
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 APEX.BK:
cost_of_equity (10.20%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.25) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.