ECF.BK WACC - Weighted Average Cost of Capital

The WACC of East Coast Furnitech PCL (ECF.BK) is 6.5%.

The Cost of Equity of East Coast Furnitech PCL (ECF.BK) is 11.50%.

The Cost of Debt of East Coast Furnitech PCL (ECF.BK) is 6.75%.

	Range	Selected
Cost of equity	8.30% - 14.70%	11.50%
Tax rate	13.60% - 20.90%	17.25%
Cost of debt	6.50% - 7.00%	6.75%
WACC	6.1% - 7.0%	6.5%

WACC

ECF.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.77	1.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	14.70%

Tax rate	13.60%	20.90%
Debt/Equity ratio	5.26	5.26
Cost of debt	6.50%	7.00%

After-tax WACC	6.1%	7.0%


Selected WACC	6.5%

ECF.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 ECF.BK:

cost_of_equity (11.50%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.77) + 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.