TRUE.BK WACC - Weighted Average Cost of Capital

The WACC of True Corporation PCL (TRUE.BK) is 7.6%.

The Cost of Equity of True Corporation PCL (TRUE.BK) is 8.40%.

The Cost of Debt of True Corporation PCL (TRUE.BK) is 7.80%.

	Range	Selected
Cost of equity	5.40% - 11.40%	8.40%
Tax rate	9.50% - 13.60%	11.55%
Cost of debt	4.50% - 11.10%	7.80%
WACC	4.8% - 10.5%	7.6%

WACC

TRUE.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.39	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	11.40%

Tax rate	9.50%	13.60%
Debt/Equity ratio	1.01	1.01
Cost of debt	4.50%	11.10%

After-tax WACC	4.8%	10.5%


Selected WACC	7.6%

TRUE.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 TRUE.BK:

cost_of_equity (8.40%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.39) + 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.