The WACC of Duo World Inc (DUUO) is 5.6%.
| Range | Selected | |
| Cost of equity | 1.20% - 101.70% | 51.45% |
| Tax rate | 2.10% - 4.80% | 3.45% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 3.9% - 7.4% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -4.82 | 13.8 |
| Additional risk adjustments | 19.5% | 20.0% |
| Cost of equity | 1.20% | 101.70% |
| Tax rate | 2.10% | 4.80% |
| Debt/Equity ratio | 128.45 | 128.45 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 3.9% | 7.4% |
| Selected WACC | 5.6% | |
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 DUUO:
cost_of_equity (51.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-4.82) + risk_adjustments (19.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.