The WACC of Balta Group NV (BALTA.BR) is 10.9%.
| Range | Selected | |
| Cost of equity | 13.50% - 23.40% | 18.45% |
| Tax rate | 25.00% - 25.00% | 25.00% |
| Cost of debt | 7.00% - 17.20% | 12.10% |
| WACC | 6.8% - 15.0% | 10.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 6.4% | 7.4% |
| Adjusted beta | 1.61 | 2.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.50% | 23.40% |
| Tax rate | 25.00% | 25.00% |
| Debt/Equity ratio | 4.13 | 4.13 |
| Cost of debt | 7.00% | 17.20% |
| After-tax WACC | 6.8% | 15.0% |
| Selected WACC | 10.9% | |
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 BALTA.BR:
cost_of_equity (18.45%) = risk_free_rate (3.45%) + equity_risk_premium (6.90%) * adjusted_beta (1.61) + 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.