BG
Bunge Ltd
Price:  
77.35 
USD
Volume:  
1,822,860.00
United States | Food Products
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BG WACC - Weighted Average Cost of Capital

The WACC of Bunge Ltd (BG) is 6.2%.

The Cost of Equity of Bunge Ltd (BG) is 7.45%.
The Cost of Debt of Bunge Ltd (BG) is 5.10%.

Range Selected
Cost of equity 6.40% - 8.50% 7.45%
Tax rate 18.30% - 20.30% 19.30%
Cost of debt 5.10% - 5.10% 5.10%
WACC 5.6% - 6.8% 6.2%
WACC

BG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.55 0.64
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.50%
Tax rate 18.30% 20.30%
Debt/Equity ratio 0.6 0.6
Cost of debt 5.10% 5.10%
After-tax WACC 5.6% 6.8%
Selected WACC 6.2%

BG'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 BG:

cost_of_equity (7.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.55) + 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.