BBDC4.SA WACC - Weighted Average Cost of Capital

The WACC of Banco Bradesco SA (BBDC4.SA) is 8.3%.

The Cost of Equity of Banco Bradesco SA (BBDC4.SA) is 25.20%.

The Cost of Debt of Banco Bradesco SA (BBDC4.SA) is 5.00%.

	Range	Selected
Cost of equity	22.30% - 28.10%	25.20%
Tax rate	11.20% - 18.30%	14.75%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.9% - 8.8%	8.3%

WACC

BBDC4.SA WACC calculation

Category	Low	High

Long-term bond rate	11.9%	12.4%
Equity market risk premium	9.5%	10.5%
Adjusted beta	1.1	1.45

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.30%	28.10%

Tax rate	11.20%	18.30%
Debt/Equity ratio	4.12	4.12
Cost of debt	5.00%	5.00%

After-tax WACC	7.9%	8.8%


Selected WACC	8.3%

BBDC4.SA'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 BBDC4.SA:

cost_of_equity (25.20%) = risk_free_rate (12.15%) + equity_risk_premium (10.00%) * adjusted_beta (1.1) + 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.