The WACC of Gaz PAO (GAZA.ME) is 17.5%.
| Range | Selected | |
| Cost of equity | 24.20% - 28.20% | 26.20% |
| Tax rate | 16.40% - 23.90% | 20.15% |
| Cost of debt | 13.50% - 24.30% | 18.90% |
| WACC | 14.3% - 20.8% | 17.5% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.72 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 24.20% | 28.20% |
| Tax rate | 16.40% | 23.90% |
| Debt/Equity ratio | 3.3 | 3.3 |
| Cost of debt | 13.50% | 24.30% |
| After-tax WACC | 14.3% | 20.8% |
| Selected WACC | 17.5% | |
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 GAZA.ME:
cost_of_equity (26.20%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.72) + 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.