BBU.UN.TO
Brookfield Business Partners LP
Price:  
35.93 
CAD
Volume:  
37,156.00
Bermuda | Construction & Engineering
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BBU.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Brookfield Business Partners LP (BBU.UN.TO) is 10.2%.

The Cost of Equity of Brookfield Business Partners LP (BBU.UN.TO) is 56.05%.
The Cost of Debt of Brookfield Business Partners LP (BBU.UN.TO) is 8.90%.

Range Selected
Cost of equity 44.20% - 67.90% 56.05%
Tax rate 15.40% - 32.90% 24.15%
Cost of debt 6.10% - 11.70% 8.90%
WACC 8.1% - 12.4% 10.2%
WACC

BBU.UN.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 8.05 10.44
Additional risk adjustments 0.0% 0.5%
Cost of equity 44.20% 67.90%
Tax rate 15.40% 32.90%
Debt/Equity ratio 12.16 12.16
Cost of debt 6.10% 11.70%
After-tax WACC 8.1% 12.4%
Selected WACC 10.2%

BBU.UN.TO'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 BBU.UN.TO:

cost_of_equity (56.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (8.05) + 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.