RED.LS WACC - Weighted Average Cost of Capital

The WACC of Reditus Sociedade Gestora de Participacoes Sociais SA (RED.LS) is 6.0%.

The Cost of Equity of Reditus Sociedade Gestora de Participacoes Sociais SA (RED.LS) is 218.95%.

The Cost of Debt of Reditus Sociedade Gestora de Participacoes Sociais SA (RED.LS) is 5.00%.

	Range	Selected
Cost of equity	51.90% - 386.00%	218.95%
Tax rate	21.00% - 21.00%	21.00%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.4% - 7.5%	6.0%

WACC

RED.LS WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.9%	7.8%
Adjusted beta	7.16	48.68

Additional risk adjustments	0.0%	0.5%
Cost of equity	51.90%	386.00%

Tax rate	21.00%	21.00%
Debt/Equity ratio	105.44	105.44
Cost of debt	5.00%	5.00%

After-tax WACC	4.4%	7.5%


Selected WACC	6.0%

RED.LS'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 RED.LS:

cost_of_equity (218.95%) = risk_free_rate (3.15%) + equity_risk_premium (7.35%) * adjusted_beta (7.16) + 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.