The WACC of Transneft' PAO (TRNFP.ME) is 18.6%.
| Range | Selected | |
| Cost of equity | 29.10% - 32.70% | 30.90% |
| Tax rate | 20.30% - 22.80% | 21.55% |
| Cost of debt | 4.00% - 16.40% | 10.20% |
| WACC | 15.3% - 22.0% | 18.6% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 1.14 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 29.10% | 32.70% |
| Tax rate | 20.30% | 22.80% |
| Debt/Equity ratio | 1.14 | 1.14 |
| Cost of debt | 4.00% | 16.40% |
| After-tax WACC | 15.3% | 22.0% |
| Selected WACC | 18.6% | |
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 TRNFP.ME:
cost_of_equity (30.90%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (1.14) + 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.