CMB.MI WACC - Weighted Average Cost of Capital
The WACC of Cembre SpA (CMB.MI) is 9.4%.
| Range | Selected | |
| Cost of equity | 7.7% - 11.3% | 9.5% |
| Tax rate | 24.0% - 24.5% | 24.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.6% - 11.2% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.48 | 0.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 11.3% |
| Tax rate | 24.0% | 24.5% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.6% | 11.2% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CMB.MI | Cembre SpA | 0.01 | 0.57 | 0.56 |
| CEA.DE | Friwo AG | 0.48 | -0.21 | -0.15 |
| GARO.ST | Garo AB | 0.3 | 0.13 | 0.11 |
| HAE1T.TL | Harju Elekter AS | 0.34 | 0.29 | 0.23 |
| HNL.DE | Dr Hoenle AG | 0.85 | 1.05 | 0.64 |
| HTRO.ST | Hexatronic Group AB | 0.62 | 0.85 | 0.58 |
| LUCE.L | Luceco PLC | 0.32 | 1.82 | 1.46 |
| PRKAB.IS | Turk Prysmian Kablo ve Sistemleri AS | 0.03 | 1.02 | 1 |
| SERI.MI | Seri Industrial SpA | 1.18 | 0.41 | 0.22 |
| TFW.L | FW Thorpe PLC | 0.02 | -0.19 | -0.19 |
| Low | High | |
| Unlevered beta | 0.23 | 0.57 |
| Relevered beta | 0.22 | 0.57 |
| Adjusted relevered beta | 0.48 | 0.71 |
CMB.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 CMB.MI:
cost_of_equity (9.50%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.48) + 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.