The WACC of ASM International NV (ASM.AS) is 6.2%.
| Range | Selected | |
| Cost of equity | 4.80% - 7.50% | 6.15% |
| Tax rate | 19.50% - 21.30% | 20.40% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.8% - 7.5% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.44 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.80% | 7.50% |
| Tax rate | 19.50% | 21.30% |
| Debt/Equity ratio | 0 | 0 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.8% | 7.5% |
| 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 ASM.AS:
cost_of_equity (6.15%) = risk_free_rate (2.85%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.