BOW.WA WACC - Weighted Average Cost of Capital

The WACC of Bowim SA (BOW.WA) is 9.5%.

The Cost of Equity of Bowim SA (BOW.WA) is 9.75%.

The Cost of Debt of Bowim SA (BOW.WA) is 10.05%.

	Range	Selected
Cost of equity	8.90% - 10.60%	9.75%
Tax rate	16.70% - 19.30%	18.00%
Cost of debt	7.00% - 13.10%	10.05%
WACC	8.3% - 10.6%	9.5%

WACC

BOW.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.53	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	10.60%

Tax rate	16.70%	19.30%
Debt/Equity ratio	0.22	0.22
Cost of debt	7.00%	13.10%

After-tax WACC	8.3%	10.6%


Selected WACC	9.5%

BOW.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 BOW.WA:

cost_of_equity (9.75%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.53) + 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.