CBK.DE
Commerzbank AG
Price:  
24.45 
EUR
Volume:  
5,390,789.00
Germany | Banks
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CBK.DE WACC - Weighted Average Cost of Capital

The WACC of Commerzbank AG (CBK.DE) is 5.6%.

The Cost of Equity of Commerzbank AG (CBK.DE) is 9.75%.
The Cost of Debt of Commerzbank AG (CBK.DE) is 5.00%.

Range Selected
Cost of equity 8.30% - 11.20% 9.75%
Tax rate 28.60% - 32.30% 30.45%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.0% 5.6%
WACC

CBK.DE WACC calculation

Category Low High
Long-term bond rate 2.8% 3.3%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.08 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.20%
Tax rate 28.60% 32.30%
Debt/Equity ratio 1.96 1.96
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.0%
Selected WACC 5.6%

CBK.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 CBK.DE:

cost_of_equity (9.75%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (1.08) + 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.