The WACC of Laguna Resorts and Hotels PCL (LRH.BK) is 6.9%.
Range | Selected | |
Cost of equity | 7.8% - 12.2% | 10% |
Tax rate | 15.8% - 25.9% | 20.85% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.7% - 8.1% | 6.9% |
Category | Low | High |
Long-term bond rate | 2.6% | 3.1% |
Equity market risk premium | 7.4% | 8.4% |
Adjusted beta | 0.7 | 1.02 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.8% | 12.2% |
Tax rate | 15.8% | 25.9% |
Debt/Equity ratio | 0.87 | 0.87 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.7% | 8.1% |
Selected WACC | 6.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
LRH.BK | Laguna Resorts and Hotels PCL | 0.87 | 0.13 | 0.08 |
2748.TW | FDC International Hotels Corp | 0.25 | 0.7 | 0.59 |
6565.T | ABhotel Co Ltd | 0.51 | 0.93 | 0.66 |
AWC.BK | Asset World Corp PCL | 1.39 | 1.5 | 0.72 |
DTC.BK | Dusit Thani PCL | 1.66 | 0.6 | 0.26 |
ERW.BK | Erawan Group PCL | 1.44 | 1.55 | 0.72 |
GRAND.BK | Grande Asset Hotels and Property PCL | 43.49 | 1.12 | 0.03 |
JSPT.JK | Jakarta Setiabudi Internasional Tbk PT | 0.3 | 1.22 | 0.98 |
OHTL.BK | OHTL PCL | 0.57 | 0.54 | 0.37 |
VRANDA.BK | Veranda Resort PCL | 2.13 | 0.48 | 0.18 |
Low | High | |
Unlevered beta | 0.33 | 0.61 |
Relevered beta | 0.55 | 1.03 |
Adjusted relevered beta | 0.7 | 1.02 |
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 LRH.BK:
cost_of_equity (10.00%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.7) + 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.