The WACC of Yevropeyskaya Elektrotekhnika PAO (EELT.ME) is 22.5%.
Range | Selected | |
Cost of equity | 20.90% - 24.70% | 22.80% |
Tax rate | 19.70% - 20.70% | 20.20% |
Cost of debt | 16.40% - 16.40% | 16.40% |
WACC | 20.7% - 24.4% | 22.5% |
Category | Low | High |
Long-term bond rate | 15.8% | 16.3% |
Equity market risk premium | 11.7% | 12.7% |
Adjusted beta | 0.44 | 0.62 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 20.90% | 24.70% |
Tax rate | 19.70% | 20.70% |
Debt/Equity ratio | 0.03 | 0.03 |
Cost of debt | 16.40% | 16.40% |
After-tax WACC | 20.7% | 24.4% |
Selected WACC | 22.5% | |
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 EELT.ME:
cost_of_equity (22.80%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * 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.