IVL.BK WACC - Weighted Average Cost of Capital

The WACC of Indorama Ventures PCL (IVL.BK) is 10.9%.

The Cost of Equity of Indorama Ventures PCL (IVL.BK) is 12.70%.

The Cost of Debt of Indorama Ventures PCL (IVL.BK) is 12.45%.

	Range	Selected
Cost of equity	10.30% - 15.10%	12.70%
Tax rate	18.20% - 19.40%	18.80%
Cost of debt	5.30% - 19.60%	12.45%
WACC	6.2% - 15.6%	10.9%

WACC

IVL.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	1.05	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	15.10%

Tax rate	18.20%	19.40%
Debt/Equity ratio	2.2	2.2
Cost of debt	5.30%	19.60%

After-tax WACC	6.2%	15.6%


Selected WACC	10.9%

IVL.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 IVL.BK:

cost_of_equity (12.70%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.05) + 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.