CENTEL.BK WACC - Weighted Average Cost of Capital

The WACC of Central Plaza Hotel PCL (CENTEL.BK) is 6.7%.

The Cost of Equity of Central Plaza Hotel PCL (CENTEL.BK) is 9.70%.

The Cost of Debt of Central Plaza Hotel PCL (CENTEL.BK) is 4.25%.

	Range	Selected
Cost of equity	8.10% - 11.30%	9.70%
Tax rate	18.60% - 23.40%	21.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.8% - 7.6%	6.7%

WACC

CENTEL.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.74	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	11.30%

Tax rate	18.60%	23.40%
Debt/Equity ratio	0.89	0.89
Cost of debt	4.00%	4.50%

After-tax WACC	5.8%	7.6%


Selected WACC	6.7%

CENTEL.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 CENTEL.BK:

cost_of_equity (9.70%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.74) + 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.