EP.BK WACC - Weighted Average Cost of Capital

The WACC of Eastern Power Group PCL (EP.BK) is 13.3%.

The Cost of Equity of Eastern Power Group PCL (EP.BK) is 9.30%.

The Cost of Debt of Eastern Power Group PCL (EP.BK) is 14.45%.

	Range	Selected
Cost of equity	7.20% - 11.40%	9.30%
Tax rate	0.90% - 0.90%	0.90%
Cost of debt	6.30% - 22.60%	14.45%
WACC	6.4% - 20.1%	13.3%

WACC

EP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.63	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	11.40%

Tax rate	0.90%	0.90%
Debt/Equity ratio	3.93	3.93
Cost of debt	6.30%	22.60%

After-tax WACC	6.4%	20.1%


Selected WACC	13.3%

EP.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 EP.BK:

cost_of_equity (9.30%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.63) + 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.