PLE.BK WACC - Weighted Average Cost of Capital

The WACC of Power Line Engineering PCL (PLE.BK) is 7.8%.

The Cost of Equity of Power Line Engineering PCL (PLE.BK) is 53.70%.

The Cost of Debt of Power Line Engineering PCL (PLE.BK) is 6.50%.

	Range	Selected
Cost of equity	25.20% - 82.20%	53.70%
Tax rate	15.60% - 23.90%	19.75%
Cost of debt	6.00% - 7.00%	6.50%
WACC	6.2% - 9.5%	7.8%

WACC

PLE.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	3.04	9.32

Additional risk adjustments	0.0%	0.5%
Cost of equity	25.20%	82.20%

Tax rate	15.60%	23.90%
Debt/Equity ratio	17.58	17.58
Cost of debt	6.00%	7.00%

After-tax WACC	6.2%	9.5%


Selected WACC	7.8%

PLE.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 PLE.BK:

cost_of_equity (53.70%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (3.04) + 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.