The WACC of Adler Group SA (ADJ.DE) is 5.9%.
| Range | Selected | |
| Cost of equity | 85.70% - 122.70% | 104.20% |
| Tax rate | 7.70% - 10.30% | 9.00% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 4.5% - 7.4% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 16.26 | 19.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 85.70% | 122.70% |
| Tax rate | 7.70% | 10.30% |
| Debt/Equity ratio | 105.83 | 105.83 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 4.5% | 7.4% |
| 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 (104.20%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (16.26) + 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.