COGN3.SA WACC - Weighted Average Cost of Capital

The WACC of Cogna Educacao SA (COGN3.SA) is 16.6%.

The Cost of Equity of Cogna Educacao SA (COGN3.SA) is 20.70%.

The Cost of Debt of Cogna Educacao SA (COGN3.SA) is 16.00%.

	Range	Selected
Cost of equity	19.20% - 22.20%	20.70%
Tax rate	10.00% - 26.60%	18.30%
Cost of debt	11.60% - 20.40%	16.00%
WACC	14.7% - 18.5%	16.6%

WACC

COGN3.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	0.77	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.20%	22.20%

Tax rate	10.00%	26.60%
Debt/Equity ratio	1.06	1.06
Cost of debt	11.60%	20.40%

After-tax WACC	14.7%	18.5%


Selected WACC	16.6%

COGN3.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 COGN3.SA:

cost_of_equity (20.70%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (0.77) + 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.