BHW.WA WACC - Weighted Average Cost of Capital

The WACC of Bank Handlowy w Warszawie SA (BHW.WA) is 10.8%.

The Cost of Equity of Bank Handlowy w Warszawie SA (BHW.WA) is 11.40%.

The Cost of Debt of Bank Handlowy w Warszawie SA (BHW.WA) is 5.00%.

	Range	Selected
Cost of equity	9.40% - 13.40%	11.40%
Tax rate	23.40% - 24.20%	23.80%
Cost of debt	5.00% - 5.00%	5.00%
WACC	9.0% - 12.7%	10.8%

WACC

BHW.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.61	0.94

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.40%	13.40%

Tax rate	23.40%	24.20%
Debt/Equity ratio	0.08	0.08
Cost of debt	5.00%	5.00%

After-tax WACC	9.0%	12.7%


Selected WACC	10.8%

BHW.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 BHW.WA:

cost_of_equity (11.40%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.61) + 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.