The WACC of Magnit PAO (MGNT.ME) is 18.4%.
| Range | Selected | |
| Cost of equity | 21.80% - 25.40% | 23.60% |
| Tax rate | 25.00% - 27.30% | 26.15% |
| Cost of debt | 9.90% - 27.60% | 18.75% |
| WACC | 14.2% - 22.6% | 18.4% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.52 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 21.80% | 25.40% |
| Tax rate | 25.00% | 27.30% |
| Debt/Equity ratio | 1.13 | 1.13 |
| Cost of debt | 9.90% | 27.60% |
| After-tax WACC | 14.2% | 22.6% |
| Selected WACC | 18.4% | |
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 (23.60%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.52) + 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.