As of today (2026-06-30), Banco Mercantil do Brasil's weighted average cost of capital is 34.09%%. Banco Mercantil do Brasil's ROIC % is 0.00% (calculated using TTM income statement data).
Banco Mercantil do Brasil earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
Banco Mercantil do Brasil (BSP:BMEB3) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Banco Mercantil do Brasil's weighted average cost of capital is 34.09%%. Banco Mercantil do Brasil's ROIC % is 0.00% (calculated using TTM income statement data).
Banco Mercantil do Brasil earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Banco Mercantil do Brasil WACC % Competitor Comparison
For the Banks - Regional subindustry, Banco Mercantil do Brasil's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Banco Mercantil do Brasil WACC % vs Banks Industry
For the Banks industry and Financial Services sector, Banco Mercantil do Brasil's WACC % distribution charts can be found below:
* The bar in red indicates where Banco Mercantil do Brasil's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Banco Mercantil do Brasil's market capitalization (E) is R$7035.319 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Banco Mercantil do Brasil's latest one-year quarterly average Book Value of Debt (D) is R$7410.5252 Mil.
a) weight of equity = E / (E + D) = 7035.319 / (7035.319 + 7410.5252) = 0.487
b) weight of debt = D / (E + D) = 7410.5252 / (7035.319 + 7410.5252) = 0.513
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.365%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Banco Mercantil do Brasil's beta is 0.9339.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.365% + 0.9339 * 6% = 9.9684%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Banco Mercantil do Brasil's interest expense (positive number) was R$4223.768 Mil. Its total Book Value of Debt (D) is R$7410.5252 Mil.
Cost of Debt = 4223.768 / 7410.5252 = 56.9969%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = -444.567 / 491.803 = -90.4%, which is less than 0%. Therefore it's set to 0%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Banco Mercantil do Brasil (BSP:BMEB3) has a WACC % of 34.09% as of Jun. 30, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Banco Mercantil do Brasil and its competitors. This is near median its historical median of 34.56. Over the past decade, Banco Mercantil do Brasil's WACC % has ranged from 20.60 to 56.67. According to the industry distribution chart, Banco Mercantil do Brasil ranks #1429 out of 1546 companies in the Banks industry, placing it in the top 92.4%.
Is Banco Mercantil do Brasil's WACC % too high?
Banco Mercantil do Brasil's current WACC % of 34.09% is near median its 10-year median of 34.56. Over the past 10 years, this metric has ranged from a low of 20.60 to a high of 56.67. The Banks industry median WACC % is 13.18. Banco Mercantil do Brasil's value of 34.09% is 158.7% above this industry median. Based on the distribution chart, Banco Mercantil do Brasil ranks #1429 out of 1546 companies in the Banks industry, which is in the bottom quartile relative to peers. Overall, Banco Mercantil do Brasil has a GF Score™ of 53/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Banco Mercantil do Brasil's WACC % compare to competitors?
According to the Banks industry distribution chart, Banco Mercantil do Brasil ranks #1429 out of 1546 companies for WACC %. This places Banco Mercantil do Brasil in the lower half of its industry. The industry median WACC % is 13.18. Banco Mercantil do Brasil's value of 34.09% is 158.7% above this benchmark. Historically, Banco Mercantil do Brasil's own WACC % has ranged from 20.60 to 56.67 over the past decade. While the company's 10-year median is 34.56 vs. the industry median of 13.18, Banco Mercantil do Brasil has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Banks company?
The median WACC % among Banks companies is 13.18, based on 1,546 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Banco Mercantil do Brasil's current WACC % of 34.09% is 158.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Banco Mercantil do Brasil and its competitors. For the Banks industry, the median WACC % is 13.18 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Banco Mercantil do Brasil's current WACC % is 34.09%, which is near median its own 10-year median of 34.56. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Banco Mercantil do Brasil stock overvalued right now?
Based on GuruFocus' analysis, Banco Mercantil do Brasil (BSP:BMEB3) is currently considered Significantly Overvalued. The stock's GF Value™ is R$39.73, compared to a current price of R$52.10 — trading 31.1% above its estimated fair value. The current WACC % is 34.09%, which is near median its 10-year median of 34.56 and 158.7% above the Banks industry median of 13.18. Banco Mercantil do Brasil's overall GF Score™ is 53/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Banco Mercantil do Brasil (BSP:BMEB3), the current WACC % is 34.09% as of Jun. 30, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Banco Mercantil do Brasil (BSP:BMEB3) Overvalued in 2026?
Based on GuruFocus' analysis, Banco Mercantil do Brasil stock appears to be overvalued.
The current stock price of R$52.10 is trading 31.1% above its estimated GF Value™ of R$39.73.
GuruFocus considers Banco Mercantil do Brasil to be Significantly Overvalued.
Key valuation signals for BSP:BMEB3:
WACC %: 34.09% (near median its 10-year median of 34.56)
GF Value™: R$39.73 vs. price of R$52.10 (31.1% above fair value)
Industry Position: 158.7% above the Banks median (#1429 of 1546)
No single metric tells the full story. See the BSP:BMEB3 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Banco Mercantil do Brasil SA offers commercial banking services. It offers personal and corporate credit cards, lease financing, business financing services, Internet banking, and other financial services. The company offers checking and savings accounts, and time deposits and funds; payroll-deductible loans, personal loans, overdraft facilities, credit cards, and vehicle financing services; private pension, insurance, and capitalization products and services; and collection, payment of taxes and fees to individuals.
53GF Score
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