CTS.WA WACC - Weighted Average Cost of Capital

The WACC of City Service SE (CTS.WA) is 9.2%.

The Cost of Equity of City Service SE (CTS.WA) is 12.35%.

The Cost of Debt of City Service SE (CTS.WA) is 5.05%.

	Range	Selected
Cost of equity	11.00% - 13.70%	12.35%
Tax rate	19.00% - 24.80%	21.90%
Cost of debt	4.00% - 6.10%	5.05%
WACC	8.1% - 10.2%	9.2%

WACC

CTS.WA WACC calculation

Category	Low	High

Long-term bond rate	5.5%	6.0%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.86	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.70%

Tax rate	19.00%	24.80%
Debt/Equity ratio	0.61	0.61
Cost of debt	4.00%	6.10%

After-tax WACC	8.1%	10.2%


Selected WACC	9.2%

CTS.WA'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 CTS.WA:

cost_of_equity (12.35%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.86) + 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.