HKUDS/Vibe-Trading · error · ValuationError

wacc: tax_rate must be within [0, 1], got {tax_rate!r}

Error message

wacc: tax_rate must be within [0, 1], got {tax_rate!r}

What it means

wacc() requires tax_rate to be a fraction in [0, 1] (not percent, not negative). Values outside that interval are rejected with ValuationError before any computation.

Source

Thrown at agent/src/quantlib/valuation/dcf.py:437

    Raises:
        MissingInputError: If the market-value or target-weight pair matching
            ``capital_structure_basis`` is not fully supplied.
        ValuationError: If ``capital_structure_basis`` is unrecognised, if
            ``tax_rate`` is outside ``[0, 1]``, if a market value is negative
            or not finite, if the market value of equity plus debt is zero
            (weights undefined), if the resulting weights are negative or do
            not sum to 1, or if ``risk_free_rate``, ``beta``,
            ``equity_risk_premium``, ``pretax_cost_of_debt``, ``size_premium``,
            ``country_risk_premium`` or a target weight is not a finite number.
    """
    if capital_structure_basis not in CAPITAL_STRUCTURE_BASES:
        raise ValuationError(
            f"wacc: capital_structure_basis must be one of "
            f"{CAPITAL_STRUCTURE_BASES}, got {capital_structure_basis!r}"
        )
    if not 0.0 <= tax_rate <= 1.0:
        raise ValuationError(f"wacc: tax_rate must be within [0, 1], got {tax_rate!r}")

    if capital_structure_basis == "current":
        missing = [
            name
            for name, value in (
                ("market_value_of_equity", market_value_of_equity),
                ("market_value_of_debt", market_value_of_debt),
            )
            if value is None
        ]
        if missing:
            raise MissingInputError(missing, "wacc")
        equity_mv = _require_nonnegative(
            market_value_of_equity, "market_value_of_equity", "wacc"
        )
        debt_mv = _require_nonnegative(
            market_value_of_debt, "market_value_of_debt", "wacc"
        )

View on GitHub (pinned to 80ffdda44c)

Solutions

1. Pass tax_rate as a decimal fraction: 25% -> 0.25
2. Clamp or validate computed effective tax rates to [0,1] before the call
3. Catch ValuationError to report the offending tax_rate value from the message

Example fix

# before
wacc(..., tax_rate=25)

# after
wacc(..., tax_rate=0.25)

assert 0.0 <= tax_rate <= 1.0, f'tax_rate must be fraction in [0,1], got {tax_rate}'
wacc(..., tax_rate=tax_rate)

def is_fraction(x) -> TypeGuard[float]:
    return isinstance(x, (int, float)) and 0.0 <= x <= 1.0

try:
    wacc(...)
except ValuationError as e:
    if 'tax_rate' in str(e):
        return wacc(..., tax_rate=min(max(tax_rate / 100 if tax_rate > 1 else tax_rate, 0), 1))
    raise

When it happens

Trigger: wacc(tax_rate=25) (percent instead of fraction), tax_rate=-0.1, or tax_rate=1.5 from an aggressive assumption.

Common situations: Tax rates copied from financial statements as '25%'; effective-tax-rate calculations going negative for companies with tax credits without clamping.

Related errors

• fcff_bridge: tax_rate must be within [0, 1], got {tax_rate!r
• {model}: {name} must be a number, got {value!r}
• {model}: capital-structure weights must be non-negative, got
• {model}: capital-structure weights must sum to 1 (within {_R
• WACCResult.wacc={self.wacc!r} does not match the weighted bl

AI-assisted analysis of HKUDS/Vibe-Trading@80ffdda44c (2026-08-28). Data as JSON: /api/errors/85986b96f3723e2a. Report an issue: GitHub.