BPOP
Popular Inc
Price:  
114.3 
USD
Volume:  
479,122
Czechia | Banks

BPOP WACC - Weighted Average Cost of Capital

The WACC of Popular Inc (BPOP) is 9.2%.

The Cost of Equity of Popular Inc (BPOP) is 9.8%.
The Cost of Debt of Popular Inc (BPOP) is 5%.

RangeSelected
Cost of equity8.4% - 11.2%9.8%
Tax rate19.2% - 21.1%20.15%
Cost of debt5.0% - 5.0%5%
WACC7.9% - 10.5%9.2%
WACC

BPOP WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.981.14
Additional risk adjustments0.0%0.5%
Cost of equity8.4%11.2%
Tax rate19.2%21.1%
Debt/Equity ratio
0.110.11
Cost of debt5.0%5.0%
After-tax WACC7.9%10.5%
Selected WACC9.2%

BPOP'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 BPOP:

cost_of_equity (9.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.