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 11.60%.

The Cost of Debt of Alteo Energiaszolgaltato Nyrt (ALTEO.BD) is 5.75%.

	Range	Selected
Cost of equity	10.60% - 12.60%	11.60%
Tax rate	19.20% - 35.80%	27.50%
Cost of debt	4.40% - 7.10%	5.75%
WACC	9.2% - 11.1%	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	0.52	0.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	12.60%

Tax rate	19.20%	35.80%
Debt/Equity ratio	0.23	0.23
Cost of debt	4.40%	7.10%

After-tax WACC	9.2%	11.1%


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 (11.60%) = risk_free_rate (6.65%) + equity_risk_premium (8.40%) * adjusted_beta (0.52) + 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.