BAP
Credicorp Ltd
Price:  
205.37 
USD
Volume:  
176,650.00
Peru | Banks
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

BAP WACC - Weighted Average Cost of Capital

The WACC of Credicorp Ltd (BAP) is 6.0%.

The Cost of Equity of Credicorp Ltd (BAP) is 7.40%.
The Cost of Debt of Credicorp Ltd (BAP) is 5.00%.

Range Selected
Cost of equity 6.10% - 8.70% 7.40%
Tax rate 29.70% - 30.90% 30.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.9% 6.0%
WACC

BAP WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.48 0.68
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 8.70%
Tax rate 29.70% 30.90%
Debt/Equity ratio 0.53 0.53
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.9%
Selected WACC 6.0%

BAP'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 BAP:

cost_of_equity (7.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.48) + 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.