The WACC of Bank VTB PAO (VTBR.ME) is 7.3%.
| Range | Selected | |
| Cost of equity | 24.00% - 33.70% | 28.85% |
| Tax rate | 16.40% - 17.00% | 16.70% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 6.7% - 7.9% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 15.8% | 16.3% |
| Equity market risk premium | 11.7% | 12.7% |
| Adjusted beta | 0.7 | 1.33 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 24.00% | 33.70% |
| Tax rate | 16.40% | 17.00% |
| Debt/Equity ratio | 6.91 | 6.91 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 6.7% | 7.9% |
| Selected WACC | 7.3% | |
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 VTBR.ME:
cost_of_equity (28.85%) = risk_free_rate (16.05%) + equity_risk_premium (12.20%) * adjusted_beta (0.7) + 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.