Citigroup SmithBarney (Reais). In a report dated June 17, 2003, Citigroup SmithBarney calculated a WACC for Petrobrás denominated in Brazilian reais (R$). Evaluate the methodology and assumptions used in this cost of capital calculation. Risk-free rate (Brazilian C-Bond) Petrobrás levered beta Market risk premium Cost of equity Cost of debt Brazilian corporate tax rate Long-term debt ratio (% of capital) WACC (RS) 9.90% 1.40 5.50% 17.60% 10.00% 34.00% 50.60% 12.00%
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Methodology: The WACC (weighted average cost of capital) is a commonly used method to calculate the cost of capital for a company. It takes into account the cost of both equity and debt, and weights them based on their proportion in the company's capital Show more…
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