KGN.WA WACC - Weighted Average Cost of Capital

The WACC of Zespol Elektrocieplowni Wroclawskich Kogeneracja SA (KGN.WA) is 7.9%.

The Cost of Equity of Zespol Elektrocieplowni Wroclawskich Kogeneracja SA (KGN.WA) is 9.05%.

The Cost of Debt of Zespol Elektrocieplowni Wroclawskich Kogeneracja SA (KGN.WA) is 6.10%.

	Range	Selected
Cost of equity	8.10% - 10.00%	9.05%
Tax rate	20.00% - 20.20%	20.10%
Cost of debt	6.10% - 6.10%	6.10%
WACC	7.2% - 8.6%	7.9%

WACC

KGN.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.41	0.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.00%

Tax rate	20.00%	20.20%
Debt/Equity ratio	0.38	0.38
Cost of debt	6.10%	6.10%

After-tax WACC	7.2%	8.6%


Selected WACC	7.9%

KGN.WA'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 KGN.WA:

cost_of_equity (9.05%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.41) + 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.