The WACC of Banpu PCL (BANPU.BK) is 9.4%.
| Range | Selected | |
| Cost of equity | 15.90% - 29.00% | 22.45% |
| Tax rate | 26.90% - 35.80% | 31.35% |
| Cost of debt | 4.90% - 14.30% | 9.60% |
| WACC | 5.9% - 13.0% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 1.8 | 3.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.90% | 29.00% |
| Tax rate | 26.90% | 35.80% |
| Debt/Equity ratio | 4.27 | 4.27 |
| Cost of debt | 4.90% | 14.30% |
| After-tax WACC | 5.9% | 13.0% |
| Selected WACC | 9.4% | |
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 BANPU.BK:
cost_of_equity (22.45%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.8) + 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.