NTO.TA WACC - Weighted Average Cost of Capital

The WACC of Neto ME Holdings Ltd (NTO.TA) is 7.9%.

The Cost of Equity of Neto ME Holdings Ltd (NTO.TA) is 9.85%.

The Cost of Debt of Neto ME Holdings Ltd (NTO.TA) is 5.15%.

	Range	Selected
Cost of equity	8.00% - 11.70%	9.85%
Tax rate	23.20% - 25.30%	24.25%
Cost of debt	4.90% - 5.40%	5.15%
WACC	6.6% - 9.2%	7.9%

WACC

NTO.TA WACC calculation

Category	Low	High

Long-term bond rate	4.8%	5.3%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.51	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	11.70%

Tax rate	23.20%	25.30%
Debt/Equity ratio	0.49	0.49
Cost of debt	4.90%	5.40%

After-tax WACC	6.6%	9.2%


Selected WACC	7.9%

NTO.TA'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 NTO.TA:

cost_of_equity (9.85%) = risk_free_rate (5.05%) + equity_risk_premium (6.60%) * adjusted_beta (0.51) + 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.