ELC.MI WACC - Weighted Average Cost of Capital

The WACC of Elica SpA (ELC.MI) is 9.3%.

The Cost of Equity of Elica SpA (ELC.MI) is 11.90%.

The Cost of Debt of Elica SpA (ELC.MI) is 9.70%.

	Range	Selected
Cost of equity	10.20% - 13.60%	11.90%
Tax rate	25.30% - 27.20%	26.25%
Cost of debt	4.00% - 15.40%	9.70%
WACC	6.3% - 12.3%	9.3%

WACC

ELC.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.78	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.20%	13.60%

Tax rate	25.30%	27.20%
Debt/Equity ratio	1.17	1.17
Cost of debt	4.00%	15.40%

After-tax WACC	6.3%	12.3%


Selected WACC	9.3%

ELC.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 ELC.MI:

cost_of_equity (11.90%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.78) + 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.