BN WACC - Weighted Average Cost of Capital

The WACC of Brookfield Corp (BN) is 7.4%.

The Cost of Equity of Brookfield Corp (BN) is 13.60%.

The Cost of Debt of Brookfield Corp (BN) is 6.15%.

	Range	Selected
Cost of equity	10.90% - 16.30%	13.60%
Tax rate	19.80% - 27.10%	23.45%
Cost of debt	5.30% - 7.00%	6.15%
WACC	6.3% - 8.5%	7.4%

WACC

BN WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.53	2.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	16.30%

Tax rate	19.80%	27.10%
Debt/Equity ratio	2.27	2.27
Cost of debt	5.30%	7.00%

After-tax WACC	6.3%	8.5%


Selected WACC	7.4%

BN'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 BN:

cost_of_equity (13.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.53) + 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.