The WACC of Exor NV (EXO.MI) is 8.0%.
| Range | Selected | |
| Cost of equity | 15.10% - 20.50% | 17.80% |
| Tax rate | 24.00% - 24.00% | 24.00% |
| Cost of debt | 5.00% - 5.00% | 5.00% |
| WACC | 7.2% - 8.8% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 4.3% | 4.8% |
| Equity market risk premium | 8.8% | 9.8% |
| Adjusted beta | 1.22 | 1.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.10% | 20.50% |
| Tax rate | 24.00% | 24.00% |
| Debt/Equity ratio | 2.36 | 2.36 |
| Cost of debt | 5.00% | 5.00% |
| After-tax WACC | 7.2% | 8.8% |
| Selected WACC | 8.0% | |
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 EXO.MI:
cost_of_equity (17.80%) = risk_free_rate (4.55%) + equity_risk_premium (9.30%) * adjusted_beta (1.22) + 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.