LUZN.TA WACC - Weighted Average Cost of Capital

The WACC of Amos Luzon Development and Energy Group Ltd (LUZN.TA) is 9.9%.

The Cost of Equity of Amos Luzon Development and Energy Group Ltd (LUZN.TA) is 10.70%.

The Cost of Debt of Amos Luzon Development and Energy Group Ltd (LUZN.TA) is 11.40%.

	Range	Selected
Cost of equity	9.50% - 11.90%	10.70%
Tax rate	19.10% - 23.00%	21.05%
Cost of debt	6.20% - 16.60%	11.40%
WACC	7.4% - 12.3%	9.9%

WACC

LUZN.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.76	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	11.90%

Tax rate	19.10%	23.00%
Debt/Equity ratio	0.89	0.89
Cost of debt	6.20%	16.60%

After-tax WACC	7.4%	12.3%


Selected WACC	9.9%

LUZN.TA'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 LUZN.TA:

cost_of_equity (10.70%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.76) + 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.