The WACC of Saratovenergo PAO (SARE.ME) is 11.5%.
| Range | Selected | |
| Cost of equity | 16.00% - 17.90% | 16.95% |
| Tax rate | 22.50% - 22.60% | 22.55% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 10.5% - 12.6% | 11.5% |
| Category | Low | High |
| Long-term bond rate | 11.6% | 12.1% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 0.63 | 0.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 16.00% | 17.90% |
| Tax rate | 22.50% | 22.60% |
| Debt/Equity ratio | 0.74 | 0.74 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 10.5% | 12.6% |
| Selected WACC | 11.5% | |
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 SARE.ME:
cost_of_equity (16.95%) = risk_free_rate (11.85%) + equity_risk_premium (7.40%) * adjusted_beta (0.63) + 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.