BEP.UN.TO WACC - Weighted Average Cost of Capital

The WACC of Brookfield Renewable Partners LP (BEP.UN.TO) is 7.5%.

The Cost of Equity of Brookfield Renewable Partners LP (BEP.UN.TO) is 7.40%.

The Cost of Debt of Brookfield Renewable Partners LP (BEP.UN.TO) is 12.75%.

	Range	Selected
Cost of equity	5.70% - 9.10%	7.40%
Tax rate	19.50% - 46.80%	33.15%
Cost of debt	5.30% - 20.20%	12.75%
WACC	4.5% - 10.5%	7.5%

WACC

BEP.UN.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.51	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.70%	9.10%

Tax rate	19.50%	46.80%
Debt/Equity ratio	5.1	5.1
Cost of debt	5.30%	20.20%

After-tax WACC	4.5%	10.5%


Selected WACC	7.5%

BEP.UN.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 BEP.UN.TO:

cost_of_equity (7.40%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.51) + 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.