MTB.MC WACC - Weighted Average Cost of Capital

The WACC of Montebalito SA (MTB.MC) is 8.1%.

The Cost of Equity of Montebalito SA (MTB.MC) is 6.90%.

The Cost of Debt of Montebalito SA (MTB.MC) is 11.80%.

	Range	Selected
Cost of equity	6.00% - 7.80%	6.90%
Tax rate	11.30% - 16.40%	13.85%
Cost of debt	7.70% - 15.90%	11.80%
WACC	6.3% - 9.8%	8.1%

WACC

MTB.MC WACC calculation

Category	Low	High

Long-term bond rate	2.8%	3.3%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.52	0.55

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	7.80%

Tax rate	11.30%	16.40%
Debt/Equity ratio	0.59	0.59
Cost of debt	7.70%	15.90%

After-tax WACC	6.3%	9.8%


Selected WACC	8.1%

MTB.MC'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 MTB.MC:

cost_of_equity (6.90%) = risk_free_rate (3.05%) + equity_risk_premium (6.80%) * 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.