ALO.PA
Alstom SA
Price:  
21.95 
EUR
Volume:  
1,297,147.00
France | Machinery
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ALO.PA WACC - Weighted Average Cost of Capital

The WACC of Alstom SA (ALO.PA) is 8.5%.

The Cost of Equity of Alstom SA (ALO.PA) is 10.65%.
The Cost of Debt of Alstom SA (ALO.PA) is 5.00%.

Range Selected
Cost of equity 9.30% - 12.00% 10.65%
Tax rate 17.20% - 21.30% 19.25%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.6% - 9.4% 8.5%
WACC

ALO.PA WACC calculation

Category Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 1.08 1.17
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.30% 12.00%
Tax rate 17.20% 21.30%
Debt/Equity ratio 0.47 0.47
Cost of debt 5.00% 5.00%
After-tax WACC 7.6% 9.4%
Selected WACC 8.5%

ALO.PA's CAPM model and how its cost of Equity is calculated

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 ALO.PA:

cost_of_equity (10.65%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (1.08) + 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.