The WACC of Wool Industry Tria Alfa SA (AAAK.AT) is 6.5%.
Range | Selected | |
Cost of equity | 6.4% - 7.9% | 7.15% |
Tax rate | 23.2% - 24.0% | 23.6% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.7% - 7.3% | 6.5% |
Category | Low | High |
Long-term bond rate | 3.3% | 3.8% |
Equity market risk premium | 8.8% | 9.8% |
Adjusted beta | 0.35 | 0.37 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.4% | 7.9% |
Tax rate | 23.2% | 24.0% |
Debt/Equity ratio | 0.29 | 0.29 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.7% | 7.3% |
Selected WACC | 6.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AAAK.AT | Wool Industry Tria Alfa SA | 0.29 | 0 | 0 |
BRKO.IS | Birko Birlesik Koyunlulular Mensucat Ticaret ve Sanayi AS | 0.24 | 0.61 | 0.51 |
BRMEN.IS | Birlik Mensucat Ticaret ve Sanayi Isletmesi AS | 0.01 | 1.05 | 1.05 |
CLF.MI | Caleffi SpA | 1.25 | 0.08 | 0.04 |
LNS1L.VS | Linas AB | 0.32 | 0.02 | 0.01 |
LTH.VI | Linz Textil Holding AG | 0.01 | 0.05 | 0.05 |
NAYP.AT | Nafpaktos Textile Industry SA | 1.44 | 0.56 | 0.27 |
PTD.L | Pittards PLC | 13.89 | -0.54 | -0.05 |
VARNH.AT | Varvaressos European Spinning Mills SA | 8.43 | 0.26 | 0.03 |
ZUC.MI | Vincenzo Zucchi SpA | 2.11 | -0.11 | -0.04 |
Low | High | |
Unlevered beta | 0.03 | 0.05 |
Relevered beta | 0.03 | 0.06 |
Adjusted relevered beta | 0.35 | 0.37 |
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 AAAK.AT:
cost_of_equity (7.15%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.35) + 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.