BPP.BK WACC - Weighted Average Cost of Capital

The WACC of Banpu Power PCL (BPP.BK) is 11.4%.

The Cost of Equity of Banpu Power PCL (BPP.BK) is 8.20%.

The Cost of Debt of Banpu Power PCL (BPP.BK) is 14.30%.

	Range	Selected
Cost of equity	6.20% - 10.20%	8.20%
Tax rate	4.20% - 6.50%	5.35%
Cost of debt	6.00% - 22.60%	14.30%
WACC	5.9% - 16.8%	11.4%

WACC

BPP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.49	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	10.20%

Tax rate	4.20%	6.50%
Debt/Equity ratio	1.55	1.55
Cost of debt	6.00%	22.60%

After-tax WACC	5.9%	16.8%


Selected WACC	11.4%

BPP.BK'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 BPP.BK:

cost_of_equity (8.20%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.49) + 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.