BCP.LS WACC - Weighted Average Cost of Capital

The WACC of Banco Comercial Portugues SA (BCP.LS) is 9.8%.

The Cost of Equity of Banco Comercial Portugues SA (BCP.LS) is 12.45%.

The Cost of Debt of Banco Comercial Portugues SA (BCP.LS) is 5.00%.

	Range	Selected
Cost of equity	10.50% - 14.40%	12.45%
Tax rate	21.00% - 21.00%	21.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	8.4% - 11.1%	9.8%

WACC

BCP.LS WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.9%	7.8%
Adjusted beta	1.11	1.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	14.40%

Tax rate	21.00%	21.00%
Debt/Equity ratio	0.46	0.46
Cost of debt	5.00%	5.00%

After-tax WACC	8.4%	11.1%


Selected WACC	9.8%

BCP.LS'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 BCP.LS:

cost_of_equity (12.45%) = risk_free_rate (3.15%) + equity_risk_premium (7.35%) * adjusted_beta (1.11) + 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.