The WACC of ADL Bionatur Solutions SA (ADL.MC) is 12.8%.
| Range | Selected | |
| Cost of equity | 7.70% - 10.00% | 8.85% |
| Tax rate | 4.60% - 5.80% | 5.20% |
| Cost of debt | 7.00% - 37.50% | 22.25% |
| WACC | 7.3% - 18.3% | 12.8% |
| Category | Low | High |
| Long-term bond rate | 3.6% | 4.1% |
| Equity market risk premium | 7.9% | 8.9% |
| Adjusted beta | 0.51 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.70% | 10.00% |
| Tax rate | 4.60% | 5.80% |
| Debt/Equity ratio | 0.49 | 0.49 |
| Cost of debt | 7.00% | 37.50% |
| After-tax WACC | 7.3% | 18.3% |
| Selected WACC | 12.8% | |
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 ADL.MC:
cost_of_equity (8.85%) = risk_free_rate (3.85%) + equity_risk_premium (8.40%) * adjusted_beta (0.51) + 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.