SGP.BK WACC - Weighted Average Cost of Capital

The WACC of Siamgas and Petrochemicals PCL (SGP.BK) is 6.5%.

The Cost of Equity of Siamgas and Petrochemicals PCL (SGP.BK) is 11.40%.

The Cost of Debt of Siamgas and Petrochemicals PCL (SGP.BK) is 5.35%.

	Range	Selected
Cost of equity	10.30% - 12.50%	11.40%
Tax rate	17.50% - 20.10%	18.80%
Cost of debt	4.50% - 6.20%	5.35%
WACC	5.8% - 7.3%	6.5%

WACC

SGP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	1.04	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.30%	12.50%

Tax rate	17.50%	20.10%
Debt/Equity ratio	2.18	2.18
Cost of debt	4.50%	6.20%

After-tax WACC	5.8%	7.3%


Selected WACC	6.5%

SGP.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 SGP.BK:

cost_of_equity (11.40%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.04) + 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.