ALPHA.AT WACC - Weighted Average Cost of Capital

The WACC of Alpha Bank SA (ALPHA.AT) is 9.0%.

The Cost of Equity of Alpha Bank SA (ALPHA.AT) is 13.70%.

The Cost of Debt of Alpha Bank SA (ALPHA.AT) is 5.00%.

	Range	Selected
Cost of equity	11.30% - 16.10%	13.70%
Tax rate	19.70% - 28.20%	23.95%
Cost of debt	5.00% - 5.00%	5.00%
WACC	7.8% - 10.1%	9.0%

WACC

ALPHA.AT WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.91	1.2

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.30%	16.10%

Tax rate	19.70%	28.20%
Debt/Equity ratio	0.92	0.92
Cost of debt	5.00%	5.00%

After-tax WACC	7.8%	10.1%


Selected WACC	9.0%

ALPHA.AT'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 ALPHA.AT:

cost_of_equity (13.70%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.91) + 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.