The WACC of Bioton SA (BIO.WA) is 10.1%.
| Range | Selected | |
| Cost of equity | 9.80% - 12.10% | 10.95% |
| Tax rate | 19.00% - 19.00% | 19.00% |
| Cost of debt | 6.30% - 7.00% | 6.65% |
| WACC | 9.1% - 11.1% | 10.1% |
| Category | Low | High |
| Long-term bond rate | 5.5% | 6.0% |
| Equity market risk premium | 6.3% | 7.3% |
| Adjusted beta | 0.68 | 0.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.80% | 12.10% |
| Tax rate | 19.00% | 19.00% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 6.30% | 7.00% |
| After-tax WACC | 9.1% | 11.1% |
| Selected WACC | 10.1% | |
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 BIO.WA:
cost_of_equity (10.95%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.68) + 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.