ALV.DE WACC - Weighted Average Cost of Capital
The WACC of Allianz SE (ALV.DE) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.6% - 9.2% | 7.9% |
| Tax rate | 25.1% - 25.5% | 25.3% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 8.1% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.75 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.6% | 9.2% |
| Tax rate | 25.1% | 25.5% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 8.1% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ALV.DE | Allianz SE | 0.24 | 0.79 | 0.67 |
| AV.L | Aviva PLC | 0.42 | 1.27 | 0.96 |
| G.MI | Assicurazioni Generali SpA | 0.76 | 0.9 | 0.57 |
| MAP.MC | Mapfre SA | 0.26 | 0.9 | 0.75 |
| PZU.WA | Powszechny Zaklad Ubezpieczen SA | 6.95 | 0.9 | 0.14 |
| SAMPO.HE | Sampo plc | 0.11 | 0.51 | 0.47 |
| TOP.CO | Topdanmark A/S | 0.04 | -0.03 | -0.03 |
| UNI.MI | Unipol Gruppo SpA | 0.45 | 1.02 | 0.76 |
| US.MI | UnipolSai Assicurazioni SpA | 0.44 | 0.4 | 0.3 |
| ZURN.SW | Zurich Insurance Group AG | 0.14 | 0.85 | 0.77 |
| Low | High | |
| Unlevered beta | 0.53 | 0.7 |
| Relevered beta | 0.63 | 0.82 |
| Adjusted relevered beta | 0.75 | 0.88 |
ALV.DE'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 ALV.DE:
cost_of_equity (7.90%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.75) + 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.