CSAN3.SA WACC - Weighted Average Cost of Capital

The WACC of Cosan SA (CSAN3.SA) is 18.7%.

The Cost of Equity of Cosan SA (CSAN3.SA) is 66.10%.

The Cost of Debt of Cosan SA (CSAN3.SA) is 13.90%.

	Range	Selected
Cost of equity	62.90% - 69.30%	66.10%
Tax rate	6.70% - 15.60%	11.15%
Cost of debt	7.40% - 20.40%	13.90%
WACC	13.8% - 23.6%	18.7%

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	5.37	5.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	62.90%	69.30%

Tax rate	6.70%	15.60%
Debt/Equity ratio	7.12	7.12
Cost of debt	7.40%	20.40%

After-tax WACC	13.8%	23.6%


Selected WACC	18.7%

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 (66.10%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (5.37) + 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.