BBDC4.SA WACC - Weighted Average Cost of Capital

The WACC of Banco Bradesco SA (BBDC4.SA) is 7.3%.

The Cost of Equity of Banco Bradesco SA (BBDC4.SA) is 21.90%.

The Cost of Debt of Banco Bradesco SA (BBDC4.SA) is 5.00%.

	Range	Selected
Cost of equity	19.00% - 24.80%	21.90%
Tax rate	24.30% - 32.60%	28.45%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.9% - 7.7%	7.3%

WACC

BBDC4.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	0.75	1.13

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.00%	24.80%

Tax rate	24.30%	32.60%
Debt/Equity ratio	3.9	3.9
Cost of debt	5.00%	5.00%

After-tax WACC	6.9%	7.7%


Selected WACC	7.3%

BBDC4.SA'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 BBDC4.SA:

cost_of_equity (21.90%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (0.75) + 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.