The WACC of DPA Group NV (DPA.AS) is 9.7%.
Range | Selected | |
Cost of equity | 12.40% - 16.20% | 14.30% |
Tax rate | 21.70% - 24.70% | 23.20% |
Cost of debt | 4.00% - 4.50% | 4.25% |
WACC | 8.6% - 10.9% | 9.7% |
Category | Low | High |
Long-term bond rate | 2.3% | 2.8% |
Equity market risk premium | 6.6% | 7.6% |
Adjusted beta | 1.52 | 1.69 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 12.40% | 16.20% |
Tax rate | 21.70% | 24.70% |
Debt/Equity ratio | 0.7 | 0.7 |
Cost of debt | 4.00% | 4.50% |
After-tax WACC | 8.6% | 10.9% |
Selected WACC | 9.7% | |
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 DPA.AS:
cost_of_equity (14.30%) = risk_free_rate (2.55%) + equity_risk_premium (7.10%) * adjusted_beta (1.52) + 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.