PEP.WA WACC - Weighted Average Cost of Capital

The WACC of Polenergia SA (PEP.WA) is 10.5%.

The Cost of Equity of Polenergia SA (PEP.WA) is 9.85%.

The Cost of Debt of Polenergia SA (PEP.WA) is 14.75%.

	Range	Selected
Cost of equity	9.00% - 10.70%	9.85%
Tax rate	20.20% - 20.30%	20.25%
Cost of debt	4.00% - 25.50%	14.75%
WACC	7.0% - 14.0%	10.5%

WACC

PEP.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.54	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	10.70%

Tax rate	20.20%	20.30%
Debt/Equity ratio	0.52	0.52
Cost of debt	4.00%	25.50%

After-tax WACC	7.0%	14.0%


Selected WACC	10.5%

PEP.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 PEP.WA:

cost_of_equity (9.85%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.54) + 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.