GRAND.BK WACC - Weighted Average Cost of Capital

The WACC of Grande Asset Hotels and Property PCL (GRAND.BK) is 12.3%.

The Cost of Equity of Grande Asset Hotels and Property PCL (GRAND.BK) is 25.25%.

The Cost of Debt of Grande Asset Hotels and Property PCL (GRAND.BK) is 14.30%.

	Range	Selected
Cost of equity	17.50% - 33.00%	25.25%
Tax rate	15.90% - 16.70%	16.30%
Cost of debt	6.00% - 22.60%	14.30%
WACC	5.4% - 19.2%	12.3%

WACC

GRAND.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	2.01	3.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.50%	33.00%

Tax rate	15.90%	16.70%
Debt/Equity ratio	32.61	32.61
Cost of debt	6.00%	22.60%

After-tax WACC	5.4%	19.2%


Selected WACC	12.3%

GRAND.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 GRAND.BK:

cost_of_equity (25.25%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (2.01) + 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.