The WACC of Elton SA (ELTON.AT) is 6.7%.
| Range | Selected | |
| Cost of equity | 7.20% - 9.00% | 8.10% |
| Tax rate | 24.20% - 26.40% | 25.30% |
| Cost of debt | 5.10% - 6.20% | 5.65% |
| WACC | 6.0% - 7.4% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.44 | 0.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.20% | 9.00% |
| Tax rate | 24.20% | 26.40% |
| Debt/Equity ratio | 0.58 | 0.58 |
| Cost of debt | 5.10% | 6.20% |
| After-tax WACC | 6.0% | 7.4% |
| Selected WACC | 6.7% | |
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 ELTON.AT:
cost_of_equity (8.10%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.44) + 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.