The WACC of Premier Marketing PCL (PM.BK) is 7.8%.
Range | Selected | |
Cost of equity | 6.3% - 9.6% | 7.95% |
Tax rate | 18.8% - 19.6% | 19.2% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 6.2% - 9.4% | 7.8% |
Category | Low | High |
Long-term bond rate | 2.6% | 3.1% |
Equity market risk premium | 7.4% | 8.4% |
Adjusted beta | 0.5 | 0.72 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.3% | 9.6% |
Tax rate | 18.8% | 19.6% |
Debt/Equity ratio | 0.04 | 0.04 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 6.2% | 9.4% |
Selected WACC | 7.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PM.BK | Premier Marketing PCL | 0.04 | 0.29 | 0.28 |
060280.KQ | Curexo Inc | 0 | 1.5 | 1.49 |
156.HK | Lippo China Resources Ltd | 1.5 | 0.75 | 0.34 |
226.HK | Lippo Ltd | 8.23 | 0.14 | 0.02 |
227840.KS | Hyundai Corporation Holdings Co Ltd | 0.26 | 0.24 | 0.2 |
530077.BO | Freshtrop Fruits Ltd | 0.05 | 1.24 | 1.19 |
8079.HK | Easy Repay Finance & Investment Ltd | 0.25 | 1.08 | 0.9 |
WAPO.JK | Wahana Pronatural Tbk PT | 0 | 1.32 | 1.32 |
WICO.JK | Wicaksana Overseas International Tbk PT | 0.69 | 0.24 | 0.15 |
WINNER.BK | Winner Group Enterprise PCL | 0.27 | 0.21 | 0.17 |
Low | High | |
Unlevered beta | 0.25 | 0.57 |
Relevered beta | 0.25 | 0.58 |
Adjusted relevered beta | 0.5 | 0.72 |
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 PM.BK:
cost_of_equity (7.95%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.5) + 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.