The WACC of Elis SA (ELIS.PA) is 6.2%.
Range | Selected | |
Cost of equity | 6.9% - 10.2% | 8.55% |
Tax rate | 29.1% - 31.0% | 30.05% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 5.2% - 7.2% | 6.2% |
Category | Low | High |
Long-term bond rate | 3.0% | 3.5% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.67 | 0.92 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.9% | 10.2% |
Tax rate | 29.1% | 31.0% |
Debt/Equity ratio | 0.73 | 0.73 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 5.2% | 7.2% |
Selected WACC | 6.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ELIS.PA | Elis SA | 0.73 | 0.71 | 0.47 |
AGK.L | Aggreko PLC | 0.22 | 1.34 | 1.16 |
BRAV.ST | Bravida Holding AB | 0.17 | 0.83 | 0.74 |
CAV1V.HE | Caverion Oyj | 0.23 | -0.09 | -0.08 |
GBF.DE | Bilfinger SE | 0.1 | 1.11 | 1.03 |
HSV.L | HomeServe PLC | 0.2 | 0.47 | 0.41 |
INTRUM.ST | Intrum AB | 6.16 | 0.91 | 0.17 |
JSG.L | Johnson Service Group PLC | 0.22 | 0.96 | 0.83 |
VIAFIN.HE | Viafin Service Oyj | 0.04 | 0.23 | 0.22 |
BYD.TO | Boyd Group Services Inc | 0.28 | 0.12 | 0.1 |
Low | High | |
Unlevered beta | 0.34 | 0.58 |
Relevered beta | 0.51 | 0.88 |
Adjusted relevered beta | 0.67 | 0.92 |
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 ELIS.PA:
cost_of_equity (8.55%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.67) + 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.