VTRU
Vitru Ltd
Price:  
9.07 
USD
Volume:  
4,112.00
Brazil | Diversified Consumer Services
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VTRU WACC - Weighted Average Cost of Capital

The WACC of Vitru Ltd (VTRU) is 11.9%.

The Cost of Equity of Vitru Ltd (VTRU) is 6.70%.
The Cost of Debt of Vitru Ltd (VTRU) is 28.55%.

Range Selected
Cost of equity 5.50% - 7.90% 6.70%
Tax rate 31.40% - 48.70% 40.05%
Cost of debt 9.10% - 48.00% 28.55%
WACC 5.9% - 17.8% 11.9%
WACC

VTRU WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.54
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.90%
Tax rate 31.40% 48.70%
Debt/Equity ratio 1.46 1.46
Cost of debt 9.10% 48.00%
After-tax WACC 5.9% 17.8%
Selected WACC 11.9%

VTRU'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 VTRU:

cost_of_equity (6.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.