The WACC of Var'yeganneftegaz PAO (VJGZ.ME) is 12.7%.
| Range | Selected | |
| Cost of equity | 18.30% - 24.00% | 21.15% |
| Tax rate | 15.60% - 16.00% | 15.80% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 11.3% - 14.1% | 12.7% |
| Category | Low | High |
| Long-term bond rate | 8.9% | 9.4% |
| Equity market risk premium | 6.9% | 7.9% |
| Adjusted beta | 1.36 | 1.78 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 18.30% | 24.00% |
| Tax rate | 15.60% | 16.00% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 11.3% | 14.1% |
| Selected WACC | 12.7% | |
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 VJGZ.ME:
cost_of_equity (21.15%) = risk_free_rate (9.15%) + equity_risk_premium (7.40%) * adjusted_beta (1.36) + 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.