ALROC.PA
Roctool SA
Price:  
0.31 
EUR
Volume:  
8,761
France | Machinery

ALROC.PA WACC - Weighted Average Cost of Capital

The WACC of Roctool SA (ALROC.PA) is 6.7%.

The Cost of Equity of Roctool SA (ALROC.PA) is 9.45%.
The Cost of Debt of Roctool SA (ALROC.PA) is 5%.

RangeSelected
Cost of equity7.8% - 11.1%9.45%
Tax rate0.8% - 1.2%1%
Cost of debt5.0% - 5.0%5%
WACC6.1% - 7.3%6.7%
WACC

ALROC.PA WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium5.8%6.8%
Adjusted beta0.821.04
Additional risk adjustments0.0%0.5%
Cost of equity7.8%11.1%
Tax rate0.8%1.2%
Debt/Equity ratio
1.561.56
Cost of debt5.0%5.0%
After-tax WACC6.1%7.3%
Selected WACC6.7%

ALROC.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 ALROC.PA:

cost_of_equity (9.45%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.82) + 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.