KA11R.RG WACC - Weighted Average Cost of Capital

The WACC of Kurzemes Atslega-1 AS (KA11R.RG) is 7.5%.

The Cost of Equity of Kurzemes Atslega-1 AS (KA11R.RG) is 6.65%.

The Cost of Debt of Kurzemes Atslega-1 AS (KA11R.RG) is 9.15%.

	Range	Selected
Cost of equity	5.10% - 8.20%	6.65%
Tax rate	0.10% - 0.40%	0.25%
Cost of debt	7.00% - 11.30%	9.15%
WACC	5.7% - 9.2%	7.5%

WACC

KA11R.RG WACC calculation

Category	Low	High

Long-term bond rate	1.0%	1.5%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.37	0.59

Additional risk adjustments	1.5%	2.0%
Cost of equity	5.10%	8.20%

Tax rate	0.10%	0.40%
Debt/Equity ratio	0.52	0.52
Cost of debt	7.00%	11.30%

After-tax WACC	5.7%	9.2%


Selected WACC	7.5%

KA11R.RG'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 KA11R.RG:

cost_of_equity (6.65%) = risk_free_rate (1.25%) + equity_risk_premium (7.35%) * adjusted_beta (0.37) + risk_adjustments (1.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.