The WACC of Atenor SA (ATEB.BR) is 6.5%.
| Range | Selected | |
| Cost of equity | 4.80% - 6.40% | 5.60% |
| Tax rate | 21.40% - 29.40% | 25.40% |
| Cost of debt | 4.00% - 14.60% | 9.30% |
| WACC | 3.5% - 9.6% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.32 | 0.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.80% | 6.40% |
| Tax rate | 21.40% | 29.40% |
| Debt/Equity ratio | 4.27 | 4.27 |
| Cost of debt | 4.00% | 14.60% |
| After-tax WACC | 3.5% | 9.6% |
| Selected WACC | 6.5% | |
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 ATEB.BR:
cost_of_equity (5.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + 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.