CIR.MI WACC - Weighted Average Cost of Capital

The WACC of CIR SpA - Compagnie Industriali Riunite (CIR.MI) is 7.1%.

The Cost of Equity of CIR SpA - Compagnie Industriali Riunite (CIR.MI) is 16.20%.

The Cost of Debt of CIR SpA - Compagnie Industriali Riunite (CIR.MI) is 4.25%.

	Range	Selected
Cost of equity	13.90% - 18.50%	16.20%
Tax rate	30.40% - 36.90%	33.65%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.4% - 7.9%	7.1%

WACC

CIR.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.23	1.48

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	18.50%

Tax rate	30.40%	36.90%
Debt/Equity ratio	2.09	2.09
Cost of debt	4.00%	4.50%

After-tax WACC	6.4%	7.9%


Selected WACC	7.1%

CIR.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 CIR.MI:

cost_of_equity (16.20%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (1.23) + 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.