PAH3.DE WACC - Weighted Average Cost of Capital

The WACC of Porsche Automobil Holding SE (PAH3.DE) is 8.1%.

The Cost of Equity of Porsche Automobil Holding SE (PAH3.DE) is 10.95%.

The Cost of Debt of Porsche Automobil Holding SE (PAH3.DE) is 4.25%.

	Range	Selected
Cost of equity	9.50% - 12.40%	10.95%
Tax rate	0.50% - 0.80%	0.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.2% - 9.1%	8.1%

WACC

PAH3.DE WACC calculation

Category	Low	High

Long-term bond rate	2.8%	3.3%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.32	1.41

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	12.40%

Tax rate	0.50%	0.80%
Debt/Equity ratio	0.71	0.71
Cost of debt	4.00%	4.50%

After-tax WACC	7.2%	9.1%


Selected WACC	8.1%

PAH3.DE's CAPM model and how its cost of Equity is calculated

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 PAH3.DE:

cost_of_equity (10.95%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (1.32) + 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.