CPL.BK WACC - Weighted Average Cost of Capital

The WACC of CPL Group PCL (CPL.BK) is 6.5%.

The Cost of Equity of CPL Group PCL (CPL.BK) is 11.90%.

The Cost of Debt of CPL Group PCL (CPL.BK) is 5.60%.

	Range	Selected
Cost of equity	10.70% - 13.10%	11.90%
Tax rate	12.90% - 20.50%	16.70%
Cost of debt	4.20% - 7.00%	5.60%
WACC	5.4% - 7.5%	6.5%

WACC

CPL.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	1.09	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.70%	13.10%

Tax rate	12.90%	20.50%
Debt/Equity ratio	2.98	2.98
Cost of debt	4.20%	7.00%

After-tax WACC	5.4%	7.5%


Selected WACC	6.5%

CPL.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 CPL.BK:

cost_of_equity (11.90%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.09) + 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.