BZU.MI WACC - Weighted Average Cost of Capital

The WACC of Buzzi Unicem SpA (BZU.MI) is 10.5%.

The Cost of Equity of Buzzi Unicem SpA (BZU.MI) is 10.90%.

The Cost of Debt of Buzzi Unicem SpA (BZU.MI) is 4.25%.

	Range	Selected
Cost of equity	9.70% - 12.10%	10.90%
Tax rate	15.00% - 17.10%	16.05%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.3% - 11.6%	10.5%

WACC

BZU.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.73	0.8

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.10%

Tax rate	15.00%	17.10%
Debt/Equity ratio	0.07	0.07
Cost of debt	4.00%	4.50%

After-tax WACC	9.3%	11.6%


Selected WACC	10.5%

BZU.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 BZU.MI:

cost_of_equity (10.90%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.