BMW.DE WACC - Weighted Average Cost of Capital
The WACC of Bayerische Motoren Werke AG (BMW.DE) is 5.7%.
| Range | Selected | |
| Cost of equity | 9.6% - 13.0% | 11.3% |
| Tax rate | 24.6% - 27.2% | 25.9% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.1% - 6.4% | 5.7% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.33 | 1.51 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.6% | 13.0% |
| Tax rate | 24.6% | 27.2% |
| Debt/Equity ratio | 2.16 | 2.16 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.1% | 6.4% |
| Selected WACC | 5.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BMW.DE | Bayerische Motoren Werke AG | 2.16 | 1.38 | 0.53 |
| AML.L | Aston Martin Lagonda Global Holdings PLC | 1.84 | 0.77 | 0.33 |
| DAI.DE | Daimler AG | 1.8 | 1.41 | 0.61 |
| FROTO.IS | Ford Otomotiv Sanayi AS | 0.13 | 0.7 | 0.65 |
| KTA.DE | Knaus Tabbert AG | 2.44 | 1.09 | 0.39 |
| RACE.MI | Ferrari NV | 0.04 | 0.75 | 0.73 |
| RNO.PA | Renault SA | 4.89 | 1.11 | 0.24 |
| STLA.MI | Stellantis NV | 0.52 | 1.3 | 0.94 |
| TOASO.IS | Tofas Turk Otomobil Fabrikasi AS | 0.34 | 1.02 | 0.81 |
| TRI.PA | Trigano SA | 0.09 | 1.35 | 1.27 |
| Low | High | |
| Unlevered beta | 0.58 | 0.68 |
| Relevered beta | 1.49 | 1.76 |
| Adjusted relevered beta | 1.33 | 1.51 |
BMW.DE'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 BMW.DE:
cost_of_equity (11.30%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (1.33) + 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.