CAI.MI WACC - Weighted Average Cost of Capital

The WACC of Cairo Communication SpA (CAI.MI) is 9.9%.

The Cost of Equity of Cairo Communication SpA (CAI.MI) is 13.60%.

The Cost of Debt of Cairo Communication SpA (CAI.MI) is 4.25%.

	Range	Selected
Cost of equity	12.20% - 15.00%	13.60%
Tax rate	18.30% - 20.70%	19.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.0% - 10.9%	9.9%

WACC

CAI.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.03	1.11

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.20%	15.00%

Tax rate	18.30%	20.70%
Debt/Equity ratio	0.57	0.57
Cost of debt	4.00%	4.50%

After-tax WACC	9.0%	10.9%


Selected WACC	9.9%

CAI.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 CAI.MI:

cost_of_equity (13.60%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (1.03) + 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.