CSED3.SA WACC - Weighted Average Cost of Capital

The WACC of Cruzeiro do Sul Educacional SA (CSED3.SA) is 12.5%.

The Cost of Equity of Cruzeiro do Sul Educacional SA (CSED3.SA) is 22.30%.

The Cost of Debt of Cruzeiro do Sul Educacional SA (CSED3.SA) is 5.00%.

	Range	Selected
Cost of equity	20.60% - 24.00%	22.30%
Tax rate	3.60% - 4.00%	3.80%
Cost of debt	5.00% - 5.00%	5.00%
WACC	11.8% - 13.3%	12.5%

WACC

CSED3.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	0.91	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.60%	24.00%

Tax rate	3.60%	4.00%
Debt/Equity ratio	1.27	1.27
Cost of debt	5.00%	5.00%

After-tax WACC	11.8%	13.3%


Selected WACC	12.5%

CSED3.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 CSED3.SA:

cost_of_equity (22.30%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (0.91) + 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.