COLOR.BK WACC - Weighted Average Cost of Capital

The WACC of Salee Colour PCL (COLOR.BK) is 6.6%.

The Cost of Equity of Salee Colour PCL (COLOR.BK) is 8.50%.

The Cost of Debt of Salee Colour PCL (COLOR.BK) is 4.25%.

	Range	Selected
Cost of equity	5.90% - 11.10%	8.50%
Tax rate	8.40% - 9.10%	8.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.0% - 8.3%	6.6%

WACC

COLOR.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.44	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	11.10%

Tax rate	8.40%	9.10%
Debt/Equity ratio	0.68	0.68
Cost of debt	4.00%	4.50%

After-tax WACC	5.0%	8.3%


Selected WACC	6.6%

COLOR.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 COLOR.BK:

cost_of_equity (8.50%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.44) + 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.