M.BK WACC - Weighted Average Cost of Capital
The WACC of MK Restaurant Group PCL (M.BK) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.5% - 12.8% | 10.65% |
| Tax rate | 13.8% - 14.6% | 14.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 11.3% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.79 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.5% | 12.8% |
| Tax rate | 13.8% | 14.6% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 11.3% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| M.BK | MK Restaurant Group PCL | 0.21 | 1.01 | 0.85 |
| 002186.SZ | China Quanjude Group Co Ltd | 0.05 | 1.36 | 1.3 |
| 6002.SR | Herfy Food Services Company SJSC | 0.35 | 1.57 | 1.2 |
| 6004.SR | Saudi Airlines Catering Company SJSC | 0.04 | 1.17 | 1.14 |
| 605108.SS | Tongqinglou Dining Co Ltd | 0.38 | 1.71 | 1.29 |
| AU.BK | After You Public Co Ltd | 0.04 | 0.73 | 0.71 |
| MM.BK | Mudman PCL | 0.96 | 0.72 | 0.4 |
| OISHI.BK | Oishi Group PCL | 0.02 | -0.34 | -0.34 |
| SNP.BK | S & P Syndicate PCL | 0.17 | 0.25 | 0.22 |
| ZEN.BK | Zen Corporation Group PCL | 0.75 | 0.67 | 0.41 |
| Low | High | |
| Unlevered beta | 0.59 | 0.97 |
| Relevered beta | 0.69 | 1.13 |
| Adjusted relevered beta | 0.79 | 1.09 |
M.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 M.BK:
cost_of_equity (10.65%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.79) + 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.