MEGA.BK WACC - Weighted Average Cost of Capital

The WACC of Mega Lifesciences PCL (MEGA.BK) is 10.6%.

The Cost of Equity of Mega Lifesciences PCL (MEGA.BK) is 10.65%.

The Cost of Debt of Mega Lifesciences PCL (MEGA.BK) is 6.40%.

	Range	Selected
Cost of equity	9.20% - 12.10%	10.65%
Tax rate	14.10% - 14.40%	14.25%
Cost of debt	4.00% - 8.80%	6.40%
WACC	9.1% - 12.0%	10.6%

WACC

MEGA.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.89	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.10%

Tax rate	14.10%	14.40%
Debt/Equity ratio	0.02	0.02
Cost of debt	4.00%	8.80%

After-tax WACC	9.1%	12.0%


Selected WACC	10.6%

MEGA.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 MEGA.BK:

cost_of_equity (10.65%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.89) + 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.