DAN.MI WACC - Weighted Average Cost of Capital

The WACC of Danieli & C Officine Meccaniche SpA (DAN.MI) is 11.3%.

The Cost of Equity of Danieli & C Officine Meccaniche SpA (DAN.MI) is 13.30%.

The Cost of Debt of Danieli & C Officine Meccaniche SpA (DAN.MI) is 5.25%.

	Range	Selected
Cost of equity	11.80% - 14.80%	13.30%
Tax rate	22.40% - 22.80%	22.60%
Cost of debt	5.10% - 5.40%	5.25%
WACC	10.1% - 12.5%	11.3%

WACC

DAN.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.97	1.09

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	14.80%

Tax rate	22.40%	22.80%
Debt/Equity ratio	0.27	0.27
Cost of debt	5.10%	5.40%

After-tax WACC	10.1%	12.5%


Selected WACC	11.3%

DAN.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 DAN.MI:

cost_of_equity (13.30%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.97) + 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.