UTP.BK WACC - Weighted Average Cost of Capital

The WACC of United Paper PCL (UTP.BK) is 8.5%.

The Cost of Equity of United Paper PCL (UTP.BK) is 8.50%.

The Cost of Debt of United Paper PCL (UTP.BK) is 4.45%.

	Range	Selected
Cost of equity	6.70% - 10.30%	8.50%
Tax rate	12.80% - 13.00%	12.90%
Cost of debt	4.00% - 4.90%	4.45%
WACC	6.7% - 10.2%	8.5%

WACC

UTP.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.56	0.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	10.30%

Tax rate	12.80%	13.00%
Debt/Equity ratio	0	0
Cost of debt	4.00%	4.90%

After-tax WACC	6.7%	10.2%


Selected WACC	8.5%

UTP.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 UTP.BK:

cost_of_equity (8.50%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.56) + 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.