The WACC of Pozbud T&R SA (POZ.WA) is 10.4%.
Range | Selected | |
Cost of equity | 12.80% - 15.70% | 14.25% |
Tax rate | 18.20% - 22.20% | 20.20% |
Cost of debt | 4.00% - 7.90% | 5.95% |
WACC | 8.9% - 11.8% | 10.4% |
Category | Low | High |
Long-term bond rate | 7.2% | 7.7% |
Equity market risk premium | 5.6% | 6.6% |
Adjusted beta | 1 | 1.13 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 12.80% | 15.70% |
Tax rate | 18.20% | 22.20% |
Debt/Equity ratio | 0.68 | 0.68 |
Cost of debt | 4.00% | 7.90% |
After-tax WACC | 8.9% | 11.8% |
Selected WACC | 10.4% | |
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 POZ.WA:
cost_of_equity (14.25%) = risk_free_rate (7.45%) + equity_risk_premium (6.10%) * adjusted_beta (1) + 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.