T.BK WACC - Weighted Average Cost of Capital

The WACC of T Engineering Corporation PCL (T.BK) is 7.5%.

The Cost of Equity of T Engineering Corporation PCL (T.BK) is 7.45%.

The Cost of Debt of T Engineering Corporation PCL (T.BK) is 5.50%.

	Range	Selected
Cost of equity	6.50% - 8.40%	7.45%
Tax rate	0.80% - 2.30%	1.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.5% - 8.4%	7.5%

WACC

T.BK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.58	0.62

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	8.40%

Tax rate	0.80%	2.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	7.00%

After-tax WACC	6.5%	8.4%


Selected WACC	7.5%

T.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 T.BK:

cost_of_equity (7.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.80%) * adjusted_beta (0.58) + 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.