BBVA.MC WACC - Weighted Average Cost of Capital
The WACC of Banco Bilbao Vizcaya Argentaria SA (BBVA.MC) is 6.7%.
| Range | Selected | |
| Cost of equity | 9.3% - 12.5% | 10.9% |
| Tax rate | 29.9% - 31.7% | 30.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 7.3% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 7.4% | 8.4% |
| Adjusted beta | 0.84 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 12.5% |
| Tax rate | 29.9% | 31.7% |
| Debt/Equity ratio | 1.32 | 1.32 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 7.3% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BBVA.MC | Banco Bilbao Vizcaya Argentaria SA | 1.32 | 1.4 | 0.74 |
| BARC.L | Barclays PLC | 5.78 | 1.79 | 0.36 |
| DANSKE.CO | Danske Bank A/S | 6.5 | 0.49 | 0.09 |
| GLE.PA | Societe Generale SA | 1.85 | 1.62 | 0.71 |
| INGA.AS | ING Groep NV | 2.82 | 1 | 0.34 |
| ISP.MI | Intesa Sanpaolo SpA | 2.1 | 1.25 | 0.51 |
| LLOY.L | Lloyds Banking Group PLC | 2.8 | 1.55 | 0.53 |
| NWG.L | Natwest Group PLC | 2.79 | 1.6 | 0.55 |
| SHB A.ST | Svenska Handelsbanken AB | 6.38 | 0.8 | 0.15 |
| STAN.L | Standard Chartered PLC | 4.17 | 1.63 | 0.42 |
| Low | High | |
| Unlevered beta | 0.4 | 0.52 |
| Relevered beta | 0.76 | 0.99 |
| Adjusted relevered beta | 0.84 | 0.99 |
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 (10.90%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.84) + 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.