The WACC of Allgeier SE (AEIN.DE) is 5.9%.
| Range | Selected | |
| Cost of equity | 6.70% - 9.90% | 8.30% |
| Tax rate | 28.50% - 32.50% | 30.50% |
| Cost of debt | 4.40% - 5.90% | 5.15% |
| WACC | 4.9% - 6.9% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.77 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.70% | 9.90% |
| Tax rate | 28.50% | 32.50% |
| Debt/Equity ratio | 1.04 | 1.04 |
| Cost of debt | 4.40% | 5.90% |
| After-tax WACC | 4.9% | 6.9% |
| 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 AEIN.DE:
cost_of_equity (8.30%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.77) + 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.