ABN.AS WACC - Weighted Average Cost of Capital

The WACC of ABN Amro Bank NV (ABN.AS) is 5.1%.

The Cost of Equity of ABN Amro Bank NV (ABN.AS) is 13.80%.

The Cost of Debt of ABN Amro Bank NV (ABN.AS) is 5.00%.

	Range	Selected
Cost of equity	11.50% - 16.10%	13.80%
Tax rate	27.40% - 30.90%	29.15%
Cost of debt	5.00% - 5.00%	5.00%
WACC	4.8% - 5.3%	5.1%

WACC

ABN.AS WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.75	2.05

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	16.10%

Tax rate	27.40%	30.90%
Debt/Equity ratio	5.77	5.77
Cost of debt	5.00%	5.00%

After-tax WACC	4.8%	5.3%


Selected WACC	5.1%

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 (13.80%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (1.75) + 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.