ESSO.BK
Esso Thailand PCL
Price:  
10.10 
THB
Volume:  
1,748,900.00
Thailand | Oil, Gas & Consumable Fuels
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ESSO.BK WACC - Weighted Average Cost of Capital

The WACC of Esso Thailand PCL (ESSO.BK) is 9.1%.

The Cost of Equity of Esso Thailand PCL (ESSO.BK) is 16.35%.
The Cost of Debt of Esso Thailand PCL (ESSO.BK) is 4.25%.

Range Selected
Cost of equity 13.40% - 19.30% 16.35%
Tax rate 19.40% - 20.00% 19.70%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.7% - 10.5% 9.1%
WACC

ESSO.BK WACC calculation

Category Low High
Long-term bond rate 2.6% 3.1%
Equity market risk premium 7.9% 8.9%
Adjusted beta 1.36 1.75
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.40% 19.30%
Tax rate 19.40% 20.00%
Debt/Equity ratio 1.27 1.27
Cost of debt 4.00% 4.50%
After-tax WACC 7.7% 10.5%
Selected WACC 9.1%

ESSO.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 ESSO.BK:

cost_of_equity (16.35%) = risk_free_rate (2.85%) + equity_risk_premium (8.40%) * adjusted_beta (1.36) + 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.