CSAN3.SA WACC - Weighted Average Cost of Capital

The WACC of Cosan SA (CSAN3.SA) is 17.3%.

The Cost of Equity of Cosan SA (CSAN3.SA) is 35.85%.

The Cost of Debt of Cosan SA (CSAN3.SA) is 15.50%.

	Range	Selected
Cost of equity	32.40% - 39.30%	35.85%
Tax rate	6.70% - 15.60%	11.15%
Cost of debt	7.40% - 23.60%	15.50%
WACC	11.3% - 23.3%	17.3%

WACC

CSAN3.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	2.17	2.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	32.40%	39.30%

Tax rate	6.70%	15.60%
Debt/Equity ratio	4.74	4.74
Cost of debt	7.40%	23.60%

After-tax WACC	11.3%	23.3%


Selected WACC	17.3%

CSAN3.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 CSAN3.SA:

cost_of_equity (35.85%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (2.17) + 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.