BBUC.TO
Brookfield Business Corp
Price:  
43.83 
CAD
Volume:  
10,643.00
United States | Industrial Conglomerates
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BBUC.TO WACC - Weighted Average Cost of Capital

The WACC of Brookfield Business Corp (BBUC.TO) is 8.1%.

The Cost of Equity of Brookfield Business Corp (BBUC.TO) is 13.00%.
The Cost of Debt of Brookfield Business Corp (BBUC.TO) is 7.20%.

Range Selected
Cost of equity 10.60% - 15.40% 13.00%
Tax rate 9.10% - 11.90% 10.50%
Cost of debt 7.00% - 7.40% 7.20%
WACC 7.4% - 8.8% 8.1%
WACC

BBUC.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.46 1.85
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.60% 15.40%
Tax rate 9.10% 11.90%
Debt/Equity ratio 2.97 2.97
Cost of debt 7.00% 7.40%
After-tax WACC 7.4% 8.8%
Selected WACC 8.1%

BBUC.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 BBUC.TO:

cost_of_equity (13.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.46) + 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.