UPF.BK WACC - Weighted Average Cost of Capital

The WACC of Union Pioneer PCL (UPF.BK) is 6.8%.

The Cost of Equity of Union Pioneer PCL (UPF.BK) is 6.95%.

The Cost of Debt of Union Pioneer PCL (UPF.BK) is 6.25%.

	Range	Selected
Cost of equity	6.10% - 7.80%	6.95%
Tax rate	15.50% - 17.50%	16.50%
Cost of debt	5.50% - 7.00%	6.25%
WACC	5.9% - 7.6%	6.8%

WACC

UPF.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.47	0.51

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.10%	7.80%

Tax rate	15.50%	17.50%
Debt/Equity ratio	0.12	0.12
Cost of debt	5.50%	7.00%

After-tax WACC	5.9%	7.6%


Selected WACC	6.8%

UPF.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 UPF.BK:

cost_of_equity (6.95%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.47) + 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.