PPS.WA WACC - Weighted Average Cost of Capital

The WACC of Przedsiebiorstwo Przemyslu Spozywczego PEPEES SA (PPS.WA) is 7.5%.

The Cost of Equity of Przedsiebiorstwo Przemyslu Spozywczego PEPEES SA (PPS.WA) is 14.10%.

The Cost of Debt of Przedsiebiorstwo Przemyslu Spozywczego PEPEES SA (PPS.WA) is 5.50%.

	Range	Selected
Cost of equity	11.20% - 17.00%	14.10%
Tax rate	21.50% - 30.80%	26.15%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.9% - 9.0%	7.5%

WACC

PPS.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.9	1.43

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.20%	17.00%

Tax rate	21.50%	30.80%
Debt/Equity ratio	1.9	1.9
Cost of debt	4.00%	7.00%

After-tax WACC	5.9%	9.0%


Selected WACC	7.5%

PPS.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 PPS.WA:

cost_of_equity (14.10%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.9) + 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.