FIVE.L WACC - Weighted Average Cost of Capital

The WACC of X5 Retail Group NV (FIVE.L) is 6.8%.

The Cost of Equity of X5 Retail Group NV (FIVE.L) is 9.65%.

The Cost of Debt of X5 Retail Group NV (FIVE.L) is 8.30%.

	Range	Selected
Cost of equity	7.90% - 11.40%	9.65%
Tax rate	28.40% - 33.00%	30.70%
Cost of debt	4.00% - 12.60%	8.30%
WACC	4.3% - 9.3%	6.8%

WACC

FIVE.L WACC calculation

Category	Low	High

Long-term bond rate	1.7%	2.2%
Equity market risk premium	4.8%	5.8%
Adjusted beta	1.29	1.5

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	11.40%

Tax rate	28.40%	33.00%
Debt/Equity ratio	2.6	2.6
Cost of debt	4.00%	12.60%

After-tax WACC	4.3%	9.3%


Selected WACC	6.8%

FIVE.L'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 FIVE.L:

cost_of_equity (9.65%) = risk_free_rate (1.95%) + equity_risk_premium (5.30%) * adjusted_beta (1.29) + 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.