The WACC of Euroconsultants SA (EUROC.AT) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.20% - 10.90% | 9.05% |
| Tax rate | 14.60% - 17.40% | 16.00% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 7.0% - 10.6% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.3% | 3.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 0.44 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.20% | 10.90% |
| Tax rate | 14.60% | 17.40% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 7.0% | 10.6% |
| Selected WACC | 8.8% | |
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 EUROC.AT:
cost_of_equity (9.05%) = risk_free_rate (3.55%) + equity_risk_premium (9.30%) * adjusted_beta (0.44) + 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.