The WACC of Acacia Pharma Group PLC (ACPH.BR) is 8.4%.
| Range | Selected | |
| Cost of equity | 6.90% - 9.10% | 8.00% |
| Tax rate | 2.40% - 3.30% | 2.85% |
| Cost of debt | 7.00% - 12.80% | 9.90% |
| WACC | 6.9% - 9.8% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.79 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.90% | 9.10% |
| Tax rate | 2.40% | 3.30% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 7.00% | 12.80% |
| After-tax WACC | 6.9% | 9.8% |
| Selected WACC | 8.4% | |
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 ACPH.BR:
cost_of_equity (8.00%) = risk_free_rate (2.95%) + equity_risk_premium (5.80%) * adjusted_beta (0.79) + 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.