COGN3.SA WACC - Weighted Average Cost of Capital

The WACC of Cogna Educacao SA (COGN3.SA) is 15.9%.

The Cost of Equity of Cogna Educacao SA (COGN3.SA) is 21.40%.

The Cost of Debt of Cogna Educacao SA (COGN3.SA) is 14.35%.

	Range	Selected
Cost of equity	19.70% - 23.10%	21.40%
Tax rate	10.00% - 26.60%	18.30%
Cost of debt	11.60% - 17.10%	14.35%
WACC	14.6% - 17.3%	15.9%

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	0.83	0.97

Additional risk adjustments	0.0%	0.5%
Cost of equity	19.70%	23.10%

Tax rate	10.00%	26.60%
Debt/Equity ratio	1.23	1.23
Cost of debt	11.60%	17.10%

After-tax WACC	14.6%	17.3%


Selected WACC	15.9%

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 (21.40%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (0.83) + 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.