BA.BK WACC - Weighted Average Cost of Capital
The WACC of Bangkok Airways PCL (BA.BK) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.3% - 10.7% | 9% |
| Tax rate | 4.2% - 9.8% | 7% |
| Cost of debt | 6.2% - 8.9% | 7.55% |
| WACC | 6.8% - 9.7% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.64 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 10.7% |
| Tax rate | 4.2% | 9.8% |
| Debt/Equity ratio | 0.54 | 0.54 |
| Cost of debt | 6.2% | 8.9% |
| After-tax WACC | 6.8% | 9.7% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BA.BK | Bangkok Airways PCL | 0.54 | -6.04 | -4.01 |
| 089590.KS | JejuAir Co Ltd | 1.21 | 0.64 | 0.3 |
| 180640.KS | Hanjin Kal | 0.08 | 1.02 | 0.95 |
| 272450.KS | Jin Air Co Ltd | 0.87 | 0.56 | 0.31 |
| 603885.SS | JUNEYAO AIRLINES Co Ltd | 1.22 | 1.28 | 0.6 |
| AAV.BK | Asia Aviation PCL | 2.92 | 1.43 | 0.38 |
| AIRARABIA.DB | Air Arabia PJSC | 0.13 | 0.81 | 0.72 |
| AQZ.AX | Alliance Aviation Services Ltd | 0.85 | 0.84 | 0.46 |
| HVN.VN | Vietnam Airlines JSC | 0.24 | 1.08 | 0.88 |
| NOK.BK | Nok Airlines PCL | 23.35 | -1.45 | -0.06 |
| THAI.BK | Thai Airways International PCL | 26.57 | 0.91 | 0.03 |
| Low | High | |
| Unlevered beta | 0.31 | 0.46 |
| Relevered beta | 0.46 | 0.78 |
| Adjusted relevered beta | 0.64 | 0.85 |
BA.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 BA.BK:
cost_of_equity (9.00%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.64) + 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.