BH.BK WACC - Weighted Average Cost of Capital

The WACC of Bumrungrad Hospital PCL (BH.BK) is 7.9%.

The Cost of Equity of Bumrungrad Hospital PCL (BH.BK) is 7.90%.

The Cost of Debt of Bumrungrad Hospital PCL (BH.BK) is 18.80%.

	Range	Selected
Cost of equity	6.60% - 9.20%	7.90%
Tax rate	17.40% - 18.00%	17.70%
Cost of debt	4.00% - 33.60%	18.80%
WACC	6.6% - 9.2%	7.9%

WACC

BH.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.55	0.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.20%

Tax rate	17.40%	18.00%
Debt/Equity ratio	0	0
Cost of debt	4.00%	33.60%

After-tax WACC	6.6%	9.2%


Selected WACC	7.9%

BH.BK'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 BH.BK:

cost_of_equity (7.90%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.55) + 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.