The WACC of Farmsintez PAO (LIFE.ME) is 22.1%.
| Range | Selected | |
| Cost of equity | 24.70% - 30.70% | 27.70% |
| Tax rate | 3.20% - 7.20% | 5.20% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 19.5% - 24.6% | 22.1% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.76 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 24.70% | 30.70% |
| Tax rate | 3.20% | 7.20% |
| Debt/Equity ratio | 0.33 | 0.33 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 19.5% | 24.6% |
| Selected WACC | 22.1% | |
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 LIFE.ME:
cost_of_equity (27.70%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.76) + 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.