ASIA.BK WACC - Weighted Average Cost of Capital
The WACC of Asia Hotel PCL (ASIA.BK) is 9.0%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.9% | 9.25% |
| Tax rate | 2.7% - 10.9% | 6.8% |
| Cost of debt | 5.2% - 14.3% | 9.75% |
| WACC | 6.0% - 12.0% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.67 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.9% |
| Tax rate | 2.7% | 10.9% |
| Debt/Equity ratio | 1.49 | 1.49 |
| Cost of debt | 5.2% | 14.3% |
| After-tax WACC | 6.0% | 12.0% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ASIA.BK | Asia Hotel PCL | 1.49 | 0.7 | 0.29 |
| DTC.BK | Dusit Thani PCL | 1.66 | 0.6 | 0.23 |
| ERW.BK | Erawan Group PCL | 1.33 | 1.68 | 0.73 |
| GRAND.BK | Grande Asset Hotels and Property PCL | 32.81 | 1.11 | 0.03 |
| LRH.BK | Laguna Resorts and Hotels PCL | 0.79 | 0.23 | 0.13 |
| MANRIN.BK | Mandarin Hotel PCL | 0.36 | 0.6 | 0.44 |
| OHTL.BK | OHTL PCL | 0.48 | 0.68 | 0.46 |
| ROH.BK | Royal Orchid Hotel Thailand PCL | 2.84 | 0.15 | 0.04 |
| SHR.BK | S Hotels and Resorts PCL | 2.8 | 1.45 | 0.39 |
| VRANDA.BK | Veranda Resort PCL | 1.74 | 0.48 | 0.18 |
| Low | High | |
| Unlevered beta | 0.21 | 0.33 |
| Relevered beta | 0.51 | 0.81 |
| Adjusted relevered beta | 0.67 | 0.87 |
ASIA.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 ASIA.BK:
cost_of_equity (9.25%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.67) + 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.