EBRO.MC
Ebro Foods SA
Price:  
17.34 
EUR
Volume:  
37,342.00
Spain | Food Products
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EBRO.MC WACC - Weighted Average Cost of Capital

The WACC of Ebro Foods SA (EBRO.MC) is 7.2%.

The Cost of Equity of Ebro Foods SA (EBRO.MC) is 7.80%.
The Cost of Debt of Ebro Foods SA (EBRO.MC) is 5.50%.

Range Selected
Cost of equity 6.60% - 9.00% 7.80%
Tax rate 26.40% - 26.80% 26.60%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.0% - 8.3% 7.2%
WACC

EBRO.MC WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 7.4% 8.4%
Adjusted beta 0.47 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 9.00%
Tax rate 26.40% 26.80%
Debt/Equity ratio 0.19 0.19
Cost of debt 4.00% 7.00%
After-tax WACC 6.0% 8.3%
Selected WACC 7.2%

EBRO.MC'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 EBRO.MC:

cost_of_equity (7.80%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.47) + 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.