COGN3.SA WACC - Weighted Average Cost of Capital

The WACC of Cogna Educacao SA (COGN3.SA) is 15.4%.

The Cost of Equity of Cogna Educacao SA (COGN3.SA) is 20.55%.

The Cost of Debt of Cogna Educacao SA (COGN3.SA) is 12.70%.

	Range	Selected
Cost of equity	18.70% - 22.40%	20.55%
Tax rate	10.00% - 26.60%	18.30%
Cost of debt	9.90% - 15.50%	12.70%
WACC	13.9% - 16.9%	15.4%

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	0.72	0.91

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.70%	22.40%

Tax rate	10.00%	26.60%
Debt/Equity ratio	0.98	0.98
Cost of debt	9.90%	15.50%

After-tax WACC	13.9%	16.9%


Selected WACC	15.4%

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 (20.55%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (0.72) + 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.