The WACC of Aimco Pesticides Ltd (524288.BO) is 204.8%.
| Range | Selected | |
| Cost of equity | 10.10% - 13.20% | 11.65% |
| Tax rate | 24.60% - 25.40% | 25.00% |
| Cost of debt | 7.00% - 3,712.30% | 1,859.65% |
| WACC | 9.5% - 400.1% | 204.8% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.39 | 0.57 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.10% | 13.20% |
| Tax rate | 24.60% | 25.40% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 7.00% | 3,712.30% |
| After-tax WACC | 9.5% | 400.1% |
| Selected WACC | 204.8% | |
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 524288.BO:
cost_of_equity (11.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.39) + 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.