TWZ.BK WACC - Weighted Average Cost of Capital

The WACC of TWZ Corporation PCL (TWZ.BK) is 10.0%.

The Cost of Equity of TWZ Corporation PCL (TWZ.BK) is 15.25%.

The Cost of Debt of TWZ Corporation PCL (TWZ.BK) is 12.10%.

	Range	Selected
Cost of equity	12.40% - 18.10%	15.25%
Tax rate	28.00% - 32.90%	30.45%
Cost of debt	4.60% - 19.60%	12.10%
WACC	5.6% - 14.4%	10.0%

WACC

TWZ.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	1.32	1.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.40%	18.10%

Tax rate	28.00%	32.90%
Debt/Equity ratio	2.91	2.91
Cost of debt	4.60%	19.60%

After-tax WACC	5.6%	14.4%


Selected WACC	10.0%

TWZ.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 TWZ.BK:

cost_of_equity (15.25%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.32) + 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.