The WACC of 4iG Nyrt (4IG.BD) is 8.5%.
| Range | Selected | |
| Cost of equity | 12.30% - 15.00% | 13.65% |
| Tax rate | 21.30% - 28.10% | 24.70% |
| Cost of debt | 7.00% - 7.10% | 7.05% |
| WACC | 8.1% - 8.8% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 6.4% | 6.9% |
| Equity market risk premium | 7.9% | 8.9% |
| Adjusted beta | 0.75 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.30% | 15.00% |
| Tax rate | 21.30% | 28.10% |
| Debt/Equity ratio | 1.66 | 1.66 |
| Cost of debt | 7.00% | 7.10% |
| After-tax WACC | 8.1% | 8.8% |
| Selected WACC | 8.5% | |
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 4IG.BD:
cost_of_equity (13.65%) = risk_free_rate (6.65%) + equity_risk_premium (8.40%) * adjusted_beta (0.75) + 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.