PLE.BK WACC - Weighted Average Cost of Capital

The WACC of Power Line Engineering PCL (PLE.BK) is 6.8%.

The Cost of Equity of Power Line Engineering PCL (PLE.BK) is 9.20%.

The Cost of Debt of Power Line Engineering PCL (PLE.BK) is 10.30%.

	Range	Selected
Cost of equity	7.20% - 11.20%	9.20%
Tax rate	27.20% - 39.10%	33.15%
Cost of debt	6.30% - 14.30%	10.30%
WACC	4.7% - 8.9%	6.8%

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	0.62	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	11.20%

Tax rate	27.20%	39.10%
Debt/Equity ratio	18.31	18.31
Cost of debt	6.30%	14.30%

After-tax WACC	4.7%	8.9%


Selected WACC	6.8%

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 (9.20%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.62) + 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.