PTTEP.BK WACC - Weighted Average Cost of Capital

The WACC of PTT Exploration and Production PCL (PTTEP.BK) is 10.5%.

The Cost of Equity of PTT Exploration and Production PCL (PTTEP.BK) is 12.90%.

The Cost of Debt of PTT Exploration and Production PCL (PTTEP.BK) is 4.25%.

	Range	Selected
Cost of equity	11.40% - 14.40%	12.90%
Tax rate	45.30% - 47.40%	46.35%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.3% - 11.8%	10.5%

WACC

PTTEP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	1.19	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	14.40%

Tax rate	45.30%	47.40%
Debt/Equity ratio	0.28	0.28
Cost of debt	4.00%	4.50%

After-tax WACC	9.3%	11.8%


Selected WACC	10.5%

PTTEP.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 PTTEP.BK:

cost_of_equity (12.90%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.19) + 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.