BMGB4.SA WACC - Weighted Average Cost of Capital

The WACC of Banco BMG SA (BMGB4.SA) is 6.7%.

The Cost of Equity of Banco BMG SA (BMGB4.SA) is 29.60%.

The Cost of Debt of Banco BMG SA (BMGB4.SA) is 5.00%.

	Range	Selected
Cost of equity	26.10% - 33.10%	29.60%
Tax rate	34.00% - 34.00%	34.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.2% - 7.1%	6.7%

WACC

BMGB4.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	1.49	1.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	26.10%	33.10%

Tax rate	34.00%	34.00%
Debt/Equity ratio	6.77	6.77
Cost of debt	5.00%	5.00%

After-tax WACC	6.2%	7.1%


Selected WACC	6.7%

BMGB4.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 BMGB4.SA:

cost_of_equity (29.60%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (1.49) + 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.