The WACC of Inter RAO YEES PAO (IRAO.ME) is 20.1%.
| Range | Selected | |
| Cost of equity | 21.80% - 24.10% | 22.95% |
| Tax rate | 19.60% - 20.30% | 19.95% |
| Cost of debt | 4.00% - 16.40% | 10.20% |
| WACC | 18.2% - 22.0% | 20.1% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.51 | 0.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.80% | 24.10% |
| Tax rate | 19.60% | 20.30% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 4.00% | 16.40% |
| After-tax WACC | 18.2% | 22.0% |
| Selected WACC | 20.1% | |
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 IRAO.ME:
cost_of_equity (22.95%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.51) + 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.