COL.MC WACC - Weighted Average Cost of Capital

The WACC of Inmobiliaria Colonial SOCIMI SA (COL.MC) is 6.0%.

The Cost of Equity of Inmobiliaria Colonial SOCIMI SA (COL.MC) is 8.65%.

The Cost of Debt of Inmobiliaria Colonial SOCIMI SA (COL.MC) is 4.25%.

	Range	Selected
Cost of equity	7.10% - 10.20%	8.65%
Tax rate	3.10% - 5.80%	4.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.2% - 6.8%	6.0%

WACC

COL.MC WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.53	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.10%	10.20%

Tax rate	3.10%	5.80%
Debt/Equity ratio	1.38	1.38
Cost of debt	4.00%	4.50%

After-tax WACC	5.2%	6.8%


Selected WACC	6.0%

COL.MC'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 COL.MC:

cost_of_equity (8.65%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.53) + 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.