ALROC.PA
Roctool SA
Price:  
0.33 
EUR
Volume:  
2,046.00
France | Machinery
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ALROC.PA WACC - Weighted Average Cost of Capital

The WACC of Roctool SA (ALROC.PA) is 6.4%.

The Cost of Equity of Roctool SA (ALROC.PA) is 9.05%.
The Cost of Debt of Roctool SA (ALROC.PA) is 5.00%.

Range Selected
Cost of equity 7.30% - 10.80% 9.05%
Tax rate 0.80% - 1.20% 1.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.8% - 7.1% 6.4%
WACC

ALROC.PA WACC calculation

Category Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 0.74 1
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 10.80%
Tax rate 0.80% 1.20%
Debt/Equity ratio 1.78 1.78
Cost of debt 5.00% 5.00%
After-tax WACC 5.8% 7.1%
Selected WACC 6.4%

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 (9.05%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.74) + 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.