DLG.MI
De' Longhi SpA
Price:  
29.46 
EUR
Volume:  
53,720
Italy | Household Durables

DLG.MI WACC - Weighted Average Cost of Capital

The WACC of De' Longhi SpA (DLG.MI) is 8.7%.

The Cost of Equity of De' Longhi SpA (DLG.MI) is 9.85%.
The Cost of Debt of De' Longhi SpA (DLG.MI) is 4.25%.

RangeSelected
Cost of equity8.6% - 11.1%9.85%
Tax rate22.9% - 23.8%23.35%
Cost of debt4.0% - 4.5%4.25%
WACC7.7% - 9.7%8.7%
WACC

DLG.MI WACC calculation

CategoryLowHigh
Long-term bond rate3.7%4.2%
Equity market risk premium8.3%9.3%
Adjusted beta0.60.69
Additional risk adjustments0.0%0.5%
Cost of equity8.6%11.1%
Tax rate22.9%23.8%
Debt/Equity ratio
0.210.21
Cost of debt4.0%4.5%
After-tax WACC7.7%9.7%
Selected WACC8.7%

DLG.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 DLG.MI:

cost_of_equity (9.85%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.6) + 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.