CON.DE WACC - Weighted Average Cost of Capital
The WACC of Continental AG (CON.DE) is 5.9%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.2% | 7.1% |
| Tax rate | 24.2% - 30.3% | 27.25% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.1% - 6.6% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.62 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.2% |
| Tax rate | 24.2% | 30.3% |
| Debt/Equity ratio | 0.44 | 0.44 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.1% | 6.6% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CON.DE | Continental AG | 0.44 | 1.26 | 0.95 |
| BUR.PA | Burelle SA | 3.83 | 0.73 | 0.19 |
| CIE.MC | CIE Automotive SA | 0.82 | 0.55 | 0.34 |
| FR.PA | Valeo SA | 3.06 | 2.08 | 0.64 |
| GEST.MC | Gestamp Automocion SA | 1.91 | 0.72 | 0.3 |
| HLE.DE | HELLA GmbH & Co KGaA | 0.12 | 0.33 | 0.31 |
| KOA.OL | Kongsberg Automotive ASA | 1.55 | 0.9 | 0.42 |
| LEO.DE | Leoni AG | 427.67 | -0.4 | 0 |
| POM.PA | Compagnie Plastic Omnium SE | 1.71 | 1.18 | 0.52 |
| SHA.DE | Schaeffler AG | 1.19 | 1.18 | 0.63 |
| Low | High | |
| Unlevered beta | 0.33 | 0.46 |
| Relevered beta | 0.43 | 0.6 |
| Adjusted relevered beta | 0.62 | 0.73 |
CON.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 CON.DE:
cost_of_equity (7.10%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + 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.