The WACC of Forestiere Equatoriale SA (FORE.PA) is 6.9%.
Range | Selected | |
Cost of equity | 5.7% - 12.5% | 9.1% |
Tax rate | 1.6% - 8.6% | 5.1% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.3% - 8.5% | 6.9% |
Category | Low | High |
Long-term bond rate | 3.0% | 3.5% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.46 | 1.25 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.7% | 12.5% |
Tax rate | 1.6% | 8.6% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.3% | 8.5% |
Selected WACC | 6.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
FORE.PA | Forestiere Equatoriale SA | 0.85 | 0.72 | 0.39 |
KSU | Kansas City Southern | 0.14 | 1.09 | 0.96 |
URAL | United Rail Inc | 76229.77 | 0.58 | 0 |
BVZN.SW | BVZ Holding AG | 2.04 | 0.29 | 0.1 |
FNM.MI | FNM SpA | 5.41 | 0.36 | 0.06 |
GLTR.L | Globaltrans Investment PLC | 0.6 | 0.99 | 0.63 |
GOG.L | Go-Ahead Group PLC | 1.06 | 1.74 | 0.86 |
METRO.IS | Metro Ticari ve Mali Yatirimlar Holding AS | 0 | 0.67 | 0.67 |
MMCAS.IS | MMC Sanayi ve Ticari Yatirimlar AS | 0 | 0.84 | 0.84 |
PKP.WA | PKP Cargo SA | 4.01 | 0.5 | 0.1 |
TRN.WA | Trans Polonia SA | 0.69 | 0.02 | 0.01 |
Low | High | |
Unlevered beta | 0.1 | 0.63 |
Relevered beta | 0.19 | 1.37 |
Adjusted relevered beta | 0.46 | 1.25 |
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 FORE.PA:
cost_of_equity (9.10%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.46) + 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.