SE-ED.BK WACC - Weighted Average Cost of Capital

The WACC of SE-Education PCL (SE-ED.BK) is 12.8%.

The Cost of Equity of SE-Education PCL (SE-ED.BK) is 14.05%.

The Cost of Debt of SE-Education PCL (SE-ED.BK) is 13.30%.

	Range	Selected
Cost of equity	11.10% - 17.00%	14.05%
Tax rate	12.60% - 17.70%	15.15%
Cost of debt	4.00% - 22.60%	13.30%
WACC	7.9% - 17.6%	12.8%

WACC

SE-ED.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	1.15	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	17.00%

Tax rate	12.60%	17.70%
Debt/Equity ratio	0.71	0.71
Cost of debt	4.00%	22.60%

After-tax WACC	7.9%	17.6%


Selected WACC	12.8%

SE-ED.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 SE-ED.BK:

cost_of_equity (14.05%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.15) + 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.