The WACC of Inapa Investimentos Participacoes e Gestao SA (INA.LS) is 4.2%.
| Range | Selected | |
| Cost of equity | 72.00% - 180.10% | 126.05% |
| Tax rate | 15.80% - 30.40% | 23.10% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.4% - 4.1% | 4.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.9% | 7.8% |
| Adjusted beta | 10.1 | 22.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 72.00% | 180.10% |
| Tax rate | 15.80% | 30.40% |
| Debt/Equity ratio | 301.42 | 301.42 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.4% | 4.1% |
| Selected WACC | 4.2% | |
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 INA.LS:
cost_of_equity (126.05%) = risk_free_rate (3.15%) + equity_risk_premium (7.35%) * adjusted_beta (10.1) + 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.