The WACC of Acsm Agam SpA (ACS.MI) is 8.4%.
| Range | Selected | |
| Cost of equity | 9.60% - 13.40% | 11.50% |
| Tax rate | 24.60% - 30.20% | 27.40% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 7.3% - 9.5% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.61 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.60% | 13.40% |
| Tax rate | 24.60% | 30.20% |
| Debt/Equity ratio | 0.64 | 0.64 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 7.3% | 9.5% |
| Selected WACC | 8.4% | |
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 ACS.MI:
cost_of_equity (11.50%) = risk_free_rate (4.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.61) + 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.