ELN.MI WACC - Weighted Average Cost of Capital

The WACC of El En SpA (ELN.MI) is 10.1%.

The Cost of Equity of El En SpA (ELN.MI) is 10.50%.

The Cost of Debt of El En SpA (ELN.MI) is 4.25%.

	Range	Selected
Cost of equity	8.80% - 12.20%	10.50%
Tax rate	25.30% - 25.60%	25.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.4% - 11.7%	10.1%

WACC

ELN.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.62	0.81

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.80%	12.20%

Tax rate	25.30%	25.60%
Debt/Equity ratio	0.06	0.06
Cost of debt	4.00%	4.50%

After-tax WACC	8.4%	11.7%


Selected WACC	10.1%

ELN.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 ELN.MI:

cost_of_equity (10.50%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.62) + 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.