ABN.AS WACC - Weighted Average Cost of Capital
The WACC of ABN Amro Bank NV (ABN.AS) is 5.1%.
| Range | Selected | |
| Cost of equity | 10.9% - 14.7% | 12.8% |
| Tax rate | 27.4% - 30.9% | 29.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.9% - 5.4% | 5.1% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.64 | 1.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.9% | 14.7% |
| Tax rate | 27.4% | 30.9% |
| Debt/Equity ratio | 4.84 | 4.84 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.9% | 5.4% |
| Selected WACC | 5.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ABN.AS | ABN Amro Bank NV | 4.84 | 0.97 | 0.22 |
| CABK.MC | Caixabank SA | 1.09 | 1.24 | 0.7 |
| CBK.DE | Commerzbank AG | 1.7 | 1.01 | 0.46 |
| DANSKE.CO | Danske Bank A/S | 6.15 | 0.49 | 0.09 |
| EBS.VI | Erste Group Bank AG | 2.16 | 1.44 | 0.57 |
| HALKB.IS | Turkiye Halk Bankasi AS | 3.91 | 1.21 | 0.32 |
| ISCTR.IS | Turkiye Is Bankasi AS | 2.81 | 1.25 | 0.42 |
| PKO.WA | Powszechna Kasa Oszczednosci Bank Polski SA | 0.31 | 1.58 | 1.3 |
| STAN.L | Standard Chartered PLC | 3.78 | 1.72 | 0.47 |
| TPEIR.AT | Piraeus Financial Holdings SA | 0.63 | 1.83 | 1.27 |
| Low | High | |
| Unlevered beta | 0.45 | 0.51 |
| Relevered beta | 1.96 | 2.24 |
| Adjusted relevered beta | 1.64 | 1.83 |
ABN.AS'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 ABN.AS:
cost_of_equity (12.80%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (1.64) + 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.