ICN.BK WACC - Weighted Average Cost of Capital

The WACC of Information and Communication Networks PCL (ICN.BK) is 7.4%.

The Cost of Equity of Information and Communication Networks PCL (ICN.BK) is 7.65%.

The Cost of Debt of Information and Communication Networks PCL (ICN.BK) is 4.25%.

	Range	Selected
Cost of equity	6.60% - 8.70%	7.65%
Tax rate	20.30% - 20.40%	20.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.4% - 8.5%	7.4%

WACC

ICN.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.54	0.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	8.70%

Tax rate	20.30%	20.40%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	4.50%

After-tax WACC	6.4%	8.5%


Selected WACC	7.4%

ICN.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 ICN.BK:

cost_of_equity (7.65%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.54) + 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.