BBVA.MC
Banco Bilbao Vizcaya Argentaria SA
Price:  
12.52 
EUR
Volume:  
8,579,868.00
Spain | Banks
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BBVA.MC WACC - Weighted Average Cost of Capital

The WACC of Banco Bilbao Vizcaya Argentaria SA (BBVA.MC) is 6.7%.

The Cost of Equity of Banco Bilbao Vizcaya Argentaria SA (BBVA.MC) is 11.15%.
The Cost of Debt of Banco Bilbao Vizcaya Argentaria SA (BBVA.MC) is 5.00%.

Range Selected
Cost of equity 9.60% - 12.70% 11.15%
Tax rate 29.90% - 31.70% 30.80%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.1% - 7.3% 6.7%
WACC

BBVA.MC WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 7.4% 8.4%
Adjusted beta 0.88 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.70%
Tax rate 29.90% 31.70%
Debt/Equity ratio 1.38 1.38
Cost of debt 5.00% 5.00%
After-tax WACC 6.1% 7.3%
Selected WACC 6.7%

BBVA.MC'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 BBVA.MC:

cost_of_equity (11.15%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.88) + 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.