The WACC of Carabao Group PCL (CBG.BK) is 7.4%.
Range | Selected | |
Cost of equity | 6.5% - 8.7% | 7.6% |
Tax rate | 15.6% - 15.9% | 15.75% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.3% - 8.4% | 7.4% |
Category | Low | High |
Long-term bond rate | 2.6% | 3.1% |
Equity market risk premium | 7.4% | 8.4% |
Adjusted beta | 0.53 | 0.61 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 8.7% |
Tax rate | 15.6% | 15.9% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.3% | 8.4% |
Selected WACC | 7.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CBG.BK | Carabao Group PCL | 0.06 | 0.95 | 0.9 |
1115.HK | Tibet Water Resources Ltd | 0.44 | 0.28 | 0.2 |
1234.TW | Hey-Song Corp | 0.1 | 0.27 | 0.25 |
2573.T | Hokkaido Coca Cola Bottling Co Ltd | 0.02 | 0.31 | 0.31 |
F&N.KL | Fraser & Neave Holdings Bhd | 0.03 | 0.5 | 0.49 |
HTC.BK | Haad Thip PCL | 0.18 | 0.2 | 0.17 |
OSP.BK | Osotspa PCL | 0.06 | 0.93 | 0.89 |
SSC.BK | Sermsuk PCL | 0.03 | -0.24 | -0.23 |
VBL.NS | Varun Beverages Ltd | 0.02 | 1.41 | 1.39 |
Y92.SI | Thai Beverage PCL | 0.81 | 0.55 | 0.33 |
Low | High | |
Unlevered beta | 0.28 | 0.39 |
Relevered beta | 0.3 | 0.42 |
Adjusted relevered beta | 0.53 | 0.61 |
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 CBG.BK:
cost_of_equity (7.60%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * 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.