The WACC of Aeroflot-Rossiyskiye Avialinii PAO (AFLT.ME) is 13.4%.
| Range | Selected | |
| Cost of equity | 21.50% - 32.00% | 26.75% |
| Tax rate | 19.40% - 21.20% | 20.30% |
| Cost of debt | 5.20% - 18.90% | 12.05% |
| WACC | 8.1% - 18.7% | 13.4% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.49 | 1.2 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.50% | 32.00% |
| Tax rate | 19.40% | 21.20% |
| Debt/Equity ratio | 3.52 | 3.52 |
| Cost of debt | 5.20% | 18.90% |
| After-tax WACC | 8.1% | 18.7% |
| Selected WACC | 13.4% | |
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 AFLT.ME:
cost_of_equity (26.75%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * 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.