TIGO
Millicom International Cellular SA
Price:  
34.02 
USD
Volume:  
718,804.00
Luxembourg | Wireless Telecommunication Services
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TIGO WACC - Weighted Average Cost of Capital

The WACC of Millicom International Cellular SA (TIGO) is 7.9%.

The Cost of Equity of Millicom International Cellular SA (TIGO) is 10.10%.
The Cost of Debt of Millicom International Cellular SA (TIGO) is 8.20%.

Range Selected
Cost of equity 8.80% - 11.40% 10.10%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 7.30% - 9.10% 8.20%
WACC 7.0% - 8.8% 7.9%
WACC

TIGO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.08 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 11.40%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1.18 1.18
Cost of debt 7.30% 9.10%
After-tax WACC 7.0% 8.8%
Selected WACC 7.9%

TIGO'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 TIGO:

cost_of_equity (10.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.08) + 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.