ESI.PA
ESI Group SA
Price:  
154 
EUR
Volume:  
402
France | Software

ESI.PA WACC - Weighted Average Cost of Capital

The WACC of ESI Group SA (ESI.PA) is 7.3%.

The Cost of Equity of ESI Group SA (ESI.PA) is 7.5%.
The Cost of Debt of ESI Group SA (ESI.PA) is 5%.

RangeSelected
Cost of equity6.2% - 8.8%7.5%
Tax rate27.5% - 38.5%33%
Cost of debt5.0% - 5.0%5%
WACC6.1% - 8.5%7.3%
WACC

ESI.PA WACC calculation

CategoryLowHigh
Long-term bond rate3.0%3.5%
Equity market risk premium5.8%6.8%
Adjusted beta0.550.7
Additional risk adjustments0.0%0.5%
Cost of equity6.2%8.8%
Tax rate27.5%38.5%
Debt/Equity ratio
0.050.05
Cost of debt5.0%5.0%
After-tax WACC6.1%8.5%
Selected WACC7.3%

ESI.PA'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 ESI.PA:

cost_of_equity (7.50%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.55) + 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.