The WACC of Sakhalinenergo PAO (SLEN.ME) is 9.8%.
| Range | Selected | |
| Cost of equity | 22.60% - 24.90% | 23.75% |
| Tax rate | 12.20% - 26.00% | 19.10% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 9.7% - 9.9% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.58 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.60% | 24.90% |
| Tax rate | 12.20% | 26.00% |
| Debt/Equity ratio | 2.42 | 2.42 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 9.7% | 9.9% |
| Selected WACC | 9.8% | |
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 SLEN.ME:
cost_of_equity (23.75%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.58) + 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.