E.TO WACC - Weighted Average Cost of Capital

The WACC of Enterprise Group Inc (E.TO) is 6.8%.

The Cost of Equity of Enterprise Group Inc (E.TO) is 6.45%.

The Cost of Debt of Enterprise Group Inc (E.TO) is 8.60%.

	Range	Selected
Cost of equity	5.40% - 7.50%	6.45%
Tax rate	1.00% - 2.10%	1.55%
Cost of debt	6.80% - 10.40%	8.60%
WACC	5.6% - 7.9%	6.8%

WACC

E.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.44	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.50%

Tax rate	1.00%	2.10%
Debt/Equity ratio	0.19	0.19
Cost of debt	6.80%	10.40%

After-tax WACC	5.6%	7.9%


Selected WACC	6.8%

E.TO'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 E.TO:

cost_of_equity (6.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.