The WACC of Sberbank Rossii PAO (SBER.ME) is 15.9%.
| Range | Selected | |
| Cost of equity | 20.50% - 22.30% | 21.40% |
| Tax rate | 19.90% - 21.50% | 20.70% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 15.3% - 16.5% | 15.9% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.4 | 0.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 20.50% | 22.30% |
| Tax rate | 19.90% | 21.50% |
| Debt/Equity ratio | 0.46 | 0.46 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 15.3% | 16.5% |
| Selected WACC | 15.9% | |
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 SBER.ME:
cost_of_equity (21.40%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.4) + 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.