CTS.WA WACC - Weighted Average Cost of Capital

The WACC of City Service SE (CTS.WA) is 9.4%.

The Cost of Equity of City Service SE (CTS.WA) is 12.75%.

The Cost of Debt of City Service SE (CTS.WA) is 5.45%.

	Range	Selected
Cost of equity	10.60% - 14.90%	12.75%
Tax rate	19.00% - 24.80%	21.90%
Cost of debt	4.20% - 6.70%	5.45%
WACC	7.8% - 11.0%	9.4%

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	0.8	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	14.90%

Tax rate	19.00%	24.80%
Debt/Equity ratio	0.64	0.64
Cost of debt	4.20%	6.70%

After-tax WACC	7.8%	11.0%


Selected WACC	9.4%

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 (12.75%) = risk_free_rate (5.75%) + equity_risk_premium (6.80%) * adjusted_beta (0.8) + 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.