CSAN3.SA WACC - Weighted Average Cost of Capital

The WACC of Cosan SA (CSAN3.SA) is 16.0%.

The Cost of Equity of Cosan SA (CSAN3.SA) is 34.95%.

The Cost of Debt of Cosan SA (CSAN3.SA) is 14.65%.

	Range	Selected
Cost of equity	31.70% - 38.20%	34.95%
Tax rate	6.70% - 13.40%	10.05%
Cost of debt	8.90% - 20.40%	14.65%
WACC	11.5% - 20.4%	16.0%

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	2.09	2.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	31.70%	38.20%

Tax rate	6.70%	13.40%
Debt/Equity ratio	6.36	6.36
Cost of debt	8.90%	20.40%

After-tax WACC	11.5%	20.4%


Selected WACC	16.0%

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 (34.95%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (2.09) + 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.