The WACC of Banco Inter SA (BIDI11.SA) is 12.3%.
| Range | Selected | |
| Cost of equity | 18.50% - 21.10% | 19.80% |
| Tax rate | 34.00% - 34.00% | 34.00% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 11.6% - 13.0% | 12.3% |
| Category | Low | High |
| Long-term bond rate | 12.9% | 13.4% |
| Equity market risk premium | 7.7% | 8.7% |
| Adjusted beta | 0.74 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 18.50% | 21.10% |
| Tax rate | 34.00% | 34.00% |
| Debt/Equity ratio | 0.84 | 0.84 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 11.6% | 13.0% |
| Selected WACC | 12.3% | |
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 BIDI11.SA:
cost_of_equity (19.80%) = risk_free_rate (13.15%) + equity_risk_premium (8.20%) * adjusted_beta (0.74) + 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.