The WACC of Aryzta AG (ARYN.SW) is 6.2%.
| Range | Selected | |
| Cost of equity | 3.30% - 5.30% | 4.30% |
| Tax rate | 14.70% - 24.30% | 19.50% |
| Cost of debt | 4.60% - 25.10% | 14.85% |
| WACC | 3.5% - 9.0% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.46 | 0.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 3.30% | 5.30% |
| Tax rate | 14.70% | 24.30% |
| Debt/Equity ratio | 0.37 | 0.37 |
| Cost of debt | 4.60% | 25.10% |
| After-tax WACC | 3.5% | 9.0% |
| Selected WACC | 6.2% | |
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 ARYN.SW:
cost_of_equity (4.30%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.46) + 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.