ITSA4.SA WACC - Weighted Average Cost of Capital

The WACC of Itausa SA (ITSA4.SA) is 17.8%.

The Cost of Equity of Itausa SA (ITSA4.SA) is 17.50%.

The Cost of Debt of Itausa SA (ITSA4.SA) is 21.15%.

	Range	Selected
Cost of equity	16.30% - 18.70%	17.50%
Tax rate	1.30% - 1.90%	1.60%
Cost of debt	10.40% - 31.90%	21.15%
WACC	15.8% - 19.8%	17.8%

WACC

ITSA4.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	0.47	0.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.30%	18.70%

Tax rate	1.30%	1.90%
Debt/Equity ratio	0.1	0.1
Cost of debt	10.40%	31.90%

After-tax WACC	15.8%	19.8%


Selected WACC	17.8%

ITSA4.SA'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 ITSA4.SA:

cost_of_equity (17.50%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (0.47) + 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.