U.BK WACC - Weighted Average Cost of Capital

The WACC of U City PCL (U.BK) is 8.5%.

The Cost of Equity of U City PCL (U.BK) is 8.80%.

The Cost of Debt of U City PCL (U.BK) is 9.70%.

	Range	Selected
Cost of equity	6.60% - 11.00%	8.80%
Tax rate	8.40% - 18.80%	13.60%
Cost of debt	4.00% - 15.40%	9.70%
WACC	5.5% - 11.6%	8.5%

WACC

U.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.51	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	11.00%

Tax rate	8.40%	18.80%
Debt/Equity ratio	0.62	0.62
Cost of debt	4.00%	15.40%

After-tax WACC	5.5%	11.6%


Selected WACC	8.5%

U.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 U.BK:

cost_of_equity (8.80%) = risk_free_rate (2.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.51) + 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.