The WACC of Europlasma SA (ALEUP.PA) is 17.1%.
| Range | Selected | |
| Cost of equity | 5.30% - 8.10% | 6.70% |
| Tax rate | 0.90% - 1.80% | 1.35% |
| Cost of debt | 7.00% - 34.00% | 20.50% |
| WACC | 6.6% - 27.5% | 17.1% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 5.8% | 6.8% |
| Adjusted beta | 0.3 | 0.53 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.30% | 8.10% |
| Tax rate | 0.90% | 1.80% |
| Debt/Equity ratio | 3.35 | 3.35 |
| Cost of debt | 7.00% | 34.00% |
| After-tax WACC | 6.6% | 27.5% |
| Selected WACC | 17.1% | |
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 ALEUP.PA:
cost_of_equity (6.70%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.3) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.