The WACC of BAVARIA Industries Group AG (B8A.DE) is 6.3%.
| Range | Selected | |
| Cost of equity | 4.80% - 8.00% | 6.40% |
| Tax rate | 10.10% - 16.30% | 13.20% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 4.7% - 7.8% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.58 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.80% | 8.00% |
| Tax rate | 10.10% | 16.30% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 4.7% | 7.8% |
| Selected WACC | 6.3% | |
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 B8A.DE:
cost_of_equity (6.40%) = risk_free_rate (2.25%) + equity_risk_premium (5.20%) * adjusted_beta (0.58) + 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.