BC.MI WACC - Weighted Average Cost of Capital

The WACC of Brunello Cucinelli SpA (BC.MI) is 8.1%.

The Cost of Equity of Brunello Cucinelli SpA (BC.MI) is 8.85%.

The Cost of Debt of Brunello Cucinelli SpA (BC.MI) is 4.35%.

	Range	Selected
Cost of equity	7.00% - 10.70%	8.85%
Tax rate	21.90% - 28.50%	25.20%
Cost of debt	4.00% - 4.70%	4.35%
WACC	6.5% - 9.7%	8.1%

WACC

BC.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.4	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	10.70%

Tax rate	21.90%	28.50%
Debt/Equity ratio	0.15	0.15
Cost of debt	4.00%	4.70%

After-tax WACC	6.5%	9.7%


Selected WACC	8.1%

BC.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 BC.MI:

cost_of_equity (8.85%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.4) + 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.