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.