cost-of-capital-analyst

Estimate WACC by fixing the currency and riskfree rate, adding a mature equity risk premium plus operation-weighted country risk, building a bottom-up beta from comparable firms, computing the cost of debt via a rating route, and weighting by market values. This brief runs each step through deterministic Python scripts.

Take the median levered beta of publicly traded comparables per business, unlever it at the sample's median D/E and tax rate, value-weight across businesses, then relever at the company's own market D/E. The toolkit's beta subcommand handles the unlevering and relevering arithmetic.

Country risk premium equals the sovereign default spread times relative equity volatility, weighted by the company's exposure measure such as revenues, production, or assets. You pick one attachment mechanism: constant exposure, beta exposure, or lambda, and record the choice.

Use a total beta when valuing a company for an undiversified owner, such as a private owner in an IPO scenario, because a market beta ignores undiversified risk and roughly doubles the value. The require-total-beta constraint enforces this.

It requires cleaned-financials.json with adjusted EBIT and lease-adjusted interest expense, market-data.json with prices, yields, and comparable betas, classification.json with constraints, and the mandate currency and valuation date. Missing fields return a blocked status rather than substituted numbers.

Book weights typically overweight debt and understate the WACC, which is the opposite of conservative. The brief requires market-value weights: equity at shares times price, and debt priced as one coupon bond using the weighted-average maturity.