The WACC of Cho Thavee PCL (CHO.BK) is 9.6%.
| Range | Selected | |
| Cost of equity | 13.40% - 86.90% | 50.15% |
| Tax rate | 1.30% - 2.40% | 1.85% |
| Cost of debt | 7.00% - 10.40% | 8.70% |
| WACC | 7.1% - 12.1% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 1.46 | 9.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.40% | 86.90% |
| Tax rate | 1.30% | 2.40% |
| Debt/Equity ratio | 37.67 | 37.67 |
| Cost of debt | 7.00% | 10.40% |
| After-tax WACC | 7.1% | 12.1% |
| Selected WACC | 9.6% | |
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 CHO.BK:
cost_of_equity (50.15%) = risk_free_rate (2.85%) + equity_risk_premium (7.90%) * adjusted_beta (1.46) + 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.