BBU.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Brookfield Business Partners LP (BBU.UN.TO) is 11.4%.

The Cost of Equity of Brookfield Business Partners LP (BBU.UN.TO) is 48.40%.

The Cost of Debt of Brookfield Business Partners LP (BBU.UN.TO) is 10.25%.

	Range	Selected
Cost of equity	41.30% - 55.50%	48.40%
Tax rate	14.50% - 31.90%	23.20%
Cost of debt	5.60% - 14.90%	10.25%
WACC	8.3% - 14.5%	11.4%

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	7.49	8.42

Additional risk adjustments	0.0%	0.5%
Cost of equity	41.30%	55.50%

Tax rate	14.50%	31.90%
Debt/Equity ratio	9.58	9.58
Cost of debt	5.60%	14.90%

After-tax WACC	8.3%	14.5%


Selected WACC	11.4%

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 (48.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (7.49) + 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.