DROME.AT WACC - Weighted Average Cost of Capital

The WACC of Dromeas Office Furniture Industry SA (DROME.AT) is 6.2%.

The Cost of Equity of Dromeas Office Furniture Industry SA (DROME.AT) is 9.00%.

The Cost of Debt of Dromeas Office Furniture Industry SA (DROME.AT) is 5.45%.

	Range	Selected
Cost of equity	6.60% - 11.40%	9.00%
Tax rate	4.90% - 13.80%	9.35%
Cost of debt	4.00% - 6.90%	5.45%
WACC	4.7% - 7.7%	6.2%

WACC

DROME.AT WACC calculation

Category	Low	High

Long-term bond rate	3.3%	3.8%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.38	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	11.40%

Tax rate	4.90%	13.80%
Debt/Equity ratio	2.07	2.07
Cost of debt	4.00%	6.90%

After-tax WACC	4.7%	7.7%


Selected WACC	6.2%

DROME.AT'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 DROME.AT:

cost_of_equity (9.00%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.38) + 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.