The WACC of TV Direct PCL (TVD.BK) is 9.1%.
| Range | Selected | |
| Cost of equity | 8.00% - 11.90% | 9.95% |
| Tax rate | 18.90% - 21.90% | 20.40% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 7.3% - 10.9% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.81 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.00% | 11.90% |
| Tax rate | 18.90% | 21.90% |
| Debt/Equity ratio | 0.19 | 0.19 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 7.3% | 10.9% |
| Selected WACC | 9.1% | |
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 TVD.BK:
cost_of_equity (9.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.80%) * adjusted_beta (0.81) + 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.