VRANDA.BK WACC - Weighted Average Cost of Capital

The WACC of Veranda Resort PCL (VRANDA.BK) is 6.3%.

The Cost of Equity of Veranda Resort PCL (VRANDA.BK) is 7.25%.

The Cost of Debt of Veranda Resort PCL (VRANDA.BK) is 7.75%.

	Range	Selected
Cost of equity	6.20% - 8.30%	7.25%
Tax rate	22.70% - 25.10%	23.90%
Cost of debt	4.40% - 11.10%	7.75%
WACC	4.3% - 8.3%	6.3%

WACC

VRANDA.BK WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.49	0.57

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.20%	8.30%

Tax rate	22.70%	25.10%
Debt/Equity ratio	2.28	2.28
Cost of debt	4.40%	11.10%

After-tax WACC	4.3%	8.3%


Selected WACC	6.3%

VRANDA.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 VRANDA.BK:

cost_of_equity (7.25%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (0.49) + 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.