ARN.MI WACC - Weighted Average Cost of Capital

The WACC of Alerion Clean Power SpA (ARN.MI) is 7.2%.

The Cost of Equity of Alerion Clean Power SpA (ARN.MI) is 10.80%.

The Cost of Debt of Alerion Clean Power SpA (ARN.MI) is 4.35%.

	Range	Selected
Cost of equity	9.20% - 12.40%	10.80%
Tax rate	15.90% - 21.20%	18.55%
Cost of debt	4.00% - 4.70%	4.35%
WACC	6.3% - 8.1%	7.2%

WACC

ARN.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.66	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.40%

Tax rate	15.90%	21.20%
Debt/Equity ratio	0.97	0.97
Cost of debt	4.00%	4.70%

After-tax WACC	6.3%	8.1%


Selected WACC	7.2%

ARN.MI'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 ARN.MI:

cost_of_equity (10.80%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.66) + 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.