ECV.DE WACC - Weighted Average Cost of Capital
The WACC of Encavis AG (ECV.DE) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.7% | 6.7% |
| Tax rate | 31.0% - 34.0% | 32.5% |
| Cost of debt | 4.0% - 8.0% | 6% |
| WACC | 4.5% - 6.7% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.56 | 0.64 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.7% |
| Tax rate | 31.0% | 34.0% |
| Debt/Equity ratio | 0.71 | 0.71 |
| Cost of debt | 4.0% | 8.0% |
| After-tax WACC | 4.5% | 6.7% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ECV.DE | Encavis AG | 0.71 | 0.02 | 0.01 |
| ABIO.PA | Albioma SA | 0.66 | 0.37 | 0.25 |
| ARISE.ST | Arise AB | 0.87 | 0.33 | 0.21 |
| ARN.MI | Alerion Clean Power SpA | 1.45 | 0.65 | 0.33 |
| FKR.MI | Falck Renewables SpA | 0.37 | 0.6 | 0.48 |
| HRPK.DE | 7C Solarparken AG | 1.5 | 0.76 | 0.38 |
| PEP.WA | Polenergia SA | 0.45 | 0.39 | 0.3 |
| SLR.MC | Solaria Energia y Medio Ambiente SA | 1.38 | 0.35 | 0.18 |
| TENERGY.AT | Terna Energy SA | 0.48 | 0.03 | 0.02 |
| VLTSA.PA | Voltalia SA | 2.14 | 0.79 | 0.32 |
| Low | High | |
| Unlevered beta | 0.24 | 0.31 |
| Relevered beta | 0.34 | 0.46 |
| Adjusted relevered beta | 0.56 | 0.64 |
ECV.DE'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 ECV.DE:
cost_of_equity (6.70%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.