COPEC.SN WACC - Weighted Average Cost of Capital

The WACC of Empresas Copec SA (COPEC.SN) is 7.9%.

The Cost of Equity of Empresas Copec SA (COPEC.SN) is 12.80%.

The Cost of Debt of Empresas Copec SA (COPEC.SN) is 5.50%.

	Range	Selected
Cost of equity	11.80% - 13.80%	12.80%
Tax rate	23.00% - 23.40%	23.20%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.8% - 9.0%	7.9%

WACC

COPEC.SN WACC calculation

Category	Low	High

Long-term bond rate	5.6%	6.1%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.98	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	13.80%

Tax rate	23.00%	23.40%
Debt/Equity ratio	1.35	1.35
Cost of debt	4.00%	7.00%

After-tax WACC	6.8%	9.0%


Selected WACC	7.9%

COPEC.SN'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 COPEC.SN:

cost_of_equity (12.80%) = risk_free_rate (5.85%) + equity_risk_premium (6.80%) * adjusted_beta (0.98) + 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.