BAMI.MI
Banco BPM SpA
Price:  
9.96 
EUR
Volume:  
6,209,734.00
Italy | Banks
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BAMI.MI WACC - Weighted Average Cost of Capital

The WACC of Banco BPM SpA (BAMI.MI) is 8.8%.

The Cost of Equity of Banco BPM SpA (BAMI.MI) is 19.45%.
The Cost of Debt of Banco BPM SpA (BAMI.MI) is 5.00%.

Range Selected
Cost of equity 15.80% - 23.10% 19.45%
Tax rate 27.70% - 30.10% 28.90%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.6% - 9.9% 8.8%
WACC

BAMI.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.47 1.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.80% 23.10%
Tax rate 27.70% 30.10%
Debt/Equity ratio 2.05 2.05
Cost of debt 5.00% 5.00%
After-tax WACC 7.6% 9.9%
Selected WACC 8.8%

BAMI.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 BAMI.MI:

cost_of_equity (19.45%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (1.47) + 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.