The WACC of Adler Group SA (ADJ.DE) is 5.9%.
| Range | Selected | |
| Cost of equity | 30.20% - 101.20% | 65.70% |
| Tax rate | 9.90% - 12.30% | 11.10% |
| Cost of debt | 5.60% - 7.00% | 6.30% |
| WACC | 5.2% - 6.7% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 5.38 | 15.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 30.20% | 101.20% |
| Tax rate | 9.90% | 12.30% |
| Debt/Equity ratio | 179.92 | 179.92 |
| Cost of debt | 5.60% | 7.00% |
| After-tax WACC | 5.2% | 6.7% |
| Selected WACC | 5.9% | |
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 ADJ.DE:
cost_of_equity (65.70%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (5.38) + 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.