The WACC of Bangchak Corporation PCL (BCP.BK) is 6.0%.
| Range | Selected | |
| Cost of equity | 12.80% - 19.60% | 16.20% |
| Tax rate | 37.50% - 43.80% | 40.65% |
| Cost of debt | 4.00% - 4.80% | 4.40% |
| WACC | 5.1% - 6.9% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 1.38 | 1.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.80% | 19.60% |
| Tax rate | 37.50% | 43.80% |
| Debt/Equity ratio | 3.01 | 3.01 |
| Cost of debt | 4.00% | 4.80% |
| After-tax WACC | 5.1% | 6.9% |
| Selected WACC | 6.0% | |
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 BCP.BK:
cost_of_equity (16.20%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.38) + 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.