The WACC of Magnit PAO (MGNT.ME) is 17.4%.
| Range | Selected | |
| Cost of equity | 21.40% - 23.80% | 22.60% |
| Tax rate | 23.60% - 26.00% | 24.80% |
| Cost of debt | 9.10% - 24.30% | 16.70% |
| WACC | 13.9% - 20.8% | 17.4% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.48 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.40% | 23.80% |
| Tax rate | 23.60% | 26.00% |
| Debt/Equity ratio | 1.06 | 1.06 |
| Cost of debt | 9.10% | 24.30% |
| After-tax WACC | 13.9% | 20.8% |
| Selected WACC | 17.4% | |
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 MGNT.ME:
cost_of_equity (22.60%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.48) + 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.