BBUC.TO WACC - Weighted Average Cost of Capital

The WACC of Brookfield Business Corp (BBUC.TO) is 8.2%.

The Cost of Equity of Brookfield Business Corp (BBUC.TO) is 12.80%.

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

	Range	Selected
Cost of equity	10.40% - 15.20%	12.80%
Tax rate	9.10% - 11.90%	10.50%
Cost of debt	7.00% - 7.40%	7.20%
WACC	7.5% - 8.9%	8.2%

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	1.41	1.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	15.20%

Tax rate	9.10%	11.90%
Debt/Equity ratio	2.65	2.65
Cost of debt	7.00%	7.40%

After-tax WACC	7.5%	8.9%


Selected WACC	8.2%

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 (12.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.41) + 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.