The WACC of Delfingen Industry SA (ALDEL.PA) is 5.7%.
| Range | Selected | |
| Cost of equity | 13.40% - 20.50% | 16.95% |
| Tax rate | 25.20% - 32.60% | 28.90% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 5.0% - 6.4% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 1.79 | 2.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.40% | 20.50% |
| Tax rate | 25.20% | 32.60% |
| Debt/Equity ratio | 4.21 | 4.21 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 5.0% | 6.4% |
| Selected WACC | 5.7% | |
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 ALDEL.PA:
cost_of_equity (16.95%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (1.79) + 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.