BIRM.TA WACC - Weighted Average Cost of Capital

The WACC of Birman Wood and Hardware Ltd (BIRM.TA) is 6.5%.

The Cost of Equity of Birman Wood and Hardware Ltd (BIRM.TA) is 10.50%.

The Cost of Debt of Birman Wood and Hardware Ltd (BIRM.TA) is 6.45%.

	Range	Selected
Cost of equity	9.20% - 11.80%	10.50%
Tax rate	23.40% - 24.80%	24.10%
Cost of debt	4.50% - 8.40%	6.45%
WACC	5.1% - 8.0%	6.5%

WACC

BIRM.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.71	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	11.80%

Tax rate	23.40%	24.80%
Debt/Equity ratio	2.39	2.39
Cost of debt	4.50%	8.40%

After-tax WACC	5.1%	8.0%


Selected WACC	6.5%

BIRM.TA'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 BIRM.TA:

cost_of_equity (10.50%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.71) + 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.