The WACC of Information and Communication Networks PCL (ICN.BK) is 7.2%.
Range | Selected | |
Cost of equity | 6.5% - 8.3% | 7.4% |
Tax rate | 20.3% - 20.4% | 20.35% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.3% - 8.1% | 7.2% |
Category | Low | High |
Long-term bond rate | 2.6% | 3.1% |
Equity market risk premium | 7.4% | 8.4% |
Adjusted beta | 0.53 | 0.56 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 8.3% |
Tax rate | 20.3% | 20.4% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.3% | 8.1% |
Selected WACC | 7.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ICN.BK | Information and Communication Networks PCL | 0.05 | 1.15 | 1.1 |
Low | High | |
Unlevered beta | 1.1 | 1.1 |
Relevered beta | 0.3 | 0.34 |
Adjusted relevered beta | 0.53 | 0.56 |
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 ICN.BK:
cost_of_equity (7.40%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.53) + 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.