ERW.BK WACC - Weighted Average Cost of Capital
The WACC of Erawan Group PCL (ERW.BK) is 8.3%.
| Range | Selected | |
| Cost of equity | 9.9% - 15.9% | 12.9% |
| Tax rate | 2.2% - 2.2% | 2.2% |
| Cost of debt | 4.0% - 5.7% | 4.85% |
| WACC | 6.5% - 10.0% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.99 | 1.46 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.9% | 15.9% |
| Tax rate | 2.2% | 2.2% |
| Debt/Equity ratio | 1.33 | 1.33 |
| Cost of debt | 4.0% | 5.7% |
| After-tax WACC | 6.5% | 10.0% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ERW.BK | Erawan Group PCL | 1.33 | 1.68 | 0.73 |
| 603199.SS | Anhui Jiuhuashan Tourism Development Co Ltd | 0 | 0.89 | 0.88 |
| AWC.BK | Asset World Corp PCL | 1.21 | 1.62 | 0.74 |
| DTC.BK | Dusit Thani PCL | 1.66 | 0.6 | 0.23 |
| LEMONTREE.NS | Lemon Tree Hotels Ltd | 0.23 | 1.1 | 0.9 |
| LRH.BK | Laguna Resorts and Hotels PCL | 0.79 | 0.23 | 0.13 |
| OHTL.BK | OHTL PCL | 0.48 | 0.68 | 0.46 |
| SHANG.KL | Shangri-La Hotels (Malaysia) Bhd | 0.31 | 1.23 | 0.94 |
| SHR.BK | S Hotels and Resorts PCL | 2.8 | 1.45 | 0.39 |
| VRANDA.BK | Veranda Resort PCL | 1.74 | 0.48 | 0.18 |
| Low | High | |
| Unlevered beta | 0.43 | 0.73 |
| Relevered beta | 0.99 | 1.69 |
| Adjusted relevered beta | 0.99 | 1.46 |
ERW.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 ERW.BK:
cost_of_equity (12.90%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.99) + 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.