BEP.WA WACC - Weighted Average Cost of Capital

The WACC of Biomass Energy Project SA (BEP.WA) is 10.1%.

The Cost of Equity of Biomass Energy Project SA (BEP.WA) is 10.20%.

The Cost of Debt of Biomass Energy Project SA (BEP.WA) is 5.50%.

	Range	Selected
Cost of equity	8.80% - 11.60%	10.20%
Tax rate	3.70% - 5.50%	4.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	8.7% - 11.5%	10.1%

WACC

BEP.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.52	0.69

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	11.60%

Tax rate	3.70%	5.50%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.00%	7.00%

After-tax WACC	8.7%	11.5%


Selected WACC	10.1%

BEP.WA'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.WA:

cost_of_equity (10.20%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.52) + 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.