The WACC of CSP Steel Center PCL (CSP.BK) is 5.6%.
Range | Selected | |
Cost of equity | 5.4% - 9.1% | 7.25% |
Tax rate | 2.9% - 5.2% | 4.05% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 4.1% - 7.0% | 5.6% |
Category | Low | High |
Long-term bond rate | 2.6% | 3.1% |
Equity market risk premium | 7.4% | 8.4% |
Adjusted beta | 0.38 | 0.66 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 9.1% |
Tax rate | 2.9% | 5.2% |
Debt/Equity ratio | 5.5 | 5.5 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 4.1% | 7.0% |
Selected WACC | 5.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CSP.BK | CSP Steel Center PCL | 5.5 | 0.65 | 0.1 |
AMC.BK | Asia Metal PCL | 1.09 | -0.25 | -0.12 |
CEN.BK | Capital Engineering Network PCL | 0.19 | 0.69 | 0.59 |
LHK.BK | Lohakit Metal PCL | 0.06 | 0.32 | 0.3 |
MILL.BK | Millcon Steel PCL | 20.66 | 1.27 | 0.06 |
PERM.BK | Permsin Steel Works PCL | 11.92 | -0.72 | -0.06 |
SAM.BK | Samchai Steel Industries PCL | 8.19 | -0.59 | -0.07 |
SSSC.BK | Siam Steel Service Center PCL | 0.09 | 0.51 | 0.47 |
TGPRO.BK | Thai-German Products PCL | 2.54 | -0.07 | -0.02 |
TYCN.BK | Tycoons Worldwide Group Thailand PCL | 1.09 | 0.06 | 0.03 |
Low | High | |
Unlevered beta | 0.01 | 0.08 |
Relevered beta | 0.07 | 0.49 |
Adjusted relevered beta | 0.38 | 0.66 |
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 CSP.BK:
cost_of_equity (7.25%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.38) + 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.