ERW.BK WACC - Weighted Average Cost of Capital

The WACC of Erawan Group PCL (ERW.BK) is 8.3%.

The Cost of Equity of Erawan Group PCL (ERW.BK) is 12.90%.

The Cost of Debt of Erawan Group PCL (ERW.BK) is 4.85%.

	Range	Selected
Cost of equity	9.90% - 15.90%	12.90%
Tax rate	2.20% - 2.20%	2.20%
Cost of debt	4.00% - 5.70%	4.85%
WACC	6.5% - 10.0%	8.3%

WACC

ERW.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.99	1.46

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.90%	15.90%

Tax rate	2.20%	2.20%
Debt/Equity ratio	1.33	1.33
Cost of debt	4.00%	5.70%

After-tax WACC	6.5%	10.0%


Selected WACC	8.3%

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.