AMS.MC WACC - Weighted Average Cost of Capital

The WACC of Amadeus IT Group SA (AMS.MC) is 9.0%.

The Cost of Equity of Amadeus IT Group SA (AMS.MC) is 9.60%.

The Cost of Debt of Amadeus IT Group SA (AMS.MC) is 4.25%.

	Range	Selected
Cost of equity	8.30% - 10.90%	9.60%
Tax rate	21.70% - 25.80%	23.75%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.8% - 10.2%	9.0%

WACC

AMS.MC WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.7	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	10.90%

Tax rate	21.70%	25.80%
Debt/Equity ratio	0.11	0.11
Cost of debt	4.00%	4.50%

After-tax WACC	7.8%	10.2%


Selected WACC	9.0%

AMS.MC'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 AMS.MC:

cost_of_equity (9.60%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.7) + 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.