The WACC of Tatneft' PAO (TATN.ME) is 24.3%.
| Range | Selected | |
| Cost of equity | 22.90% - 27.20% | 25.05% |
| Tax rate | 22.30% - 23.70% | 23.00% |
| Cost of debt | 5.10% - 16.40% | 10.75% |
| WACC | 22.1% - 26.6% | 24.3% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.61 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 22.90% | 27.20% |
| Tax rate | 22.30% | 23.70% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.10% | 16.40% |
| After-tax WACC | 22.1% | 26.6% |
| Selected WACC | 24.3% | |
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 TATN.ME:
cost_of_equity (25.05%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.61) + 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.