ALTEO.BD WACC - Weighted Average Cost of Capital

The WACC of Alteo Energiaszolgaltato Nyrt (ALTEO.BD) is 10.1%.

The Cost of Equity of Alteo Energiaszolgaltato Nyrt (ALTEO.BD) is 11.35%.

The Cost of Debt of Alteo Energiaszolgaltato Nyrt (ALTEO.BD) is 6.05%.

	Range	Selected
Cost of equity	10.40% - 12.30%	11.35%
Tax rate	19.20% - 22.10%	20.65%
Cost of debt	4.80% - 7.30%	6.05%
WACC	9.1% - 11.0%	10.1%

WACC

ALTEO.BD WACC calculation

Category	Low	High

Long-term bond rate	6.4%	6.9%
Equity market risk premium	7.9%	8.9%
Adjusted beta	0.5	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.40%	12.30%

Tax rate	19.20%	22.10%
Debt/Equity ratio	0.24	0.24
Cost of debt	4.80%	7.30%

After-tax WACC	9.1%	11.0%


Selected WACC	10.1%

ALTEO.BD'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 ALTEO.BD:

cost_of_equity (11.35%) = risk_free_rate (6.65%) + equity_risk_premium (8.40%) * adjusted_beta (0.5) + 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.