G.MI
Assicurazioni Generali SpA
Price:  
32.59 
EUR
Volume:  
3,267,461.00
Italy | Insurance
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G.MI WACC - Weighted Average Cost of Capital

The WACC of Assicurazioni Generali SpA (G.MI) is 8.8%.

The Cost of Equity of Assicurazioni Generali SpA (G.MI) is 12.85%.
The Cost of Debt of Assicurazioni Generali SpA (G.MI) is 5.00%.

Range Selected
Cost of equity 11.50% - 14.20% 12.85%
Tax rate 30.40% - 32.20% 31.30%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.0% - 9.6% 8.8%
WACC

G.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.94 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.50% 14.20%
Tax rate 30.40% 32.20%
Debt/Equity ratio 0.75 0.75
Cost of debt 5.00% 5.00%
After-tax WACC 8.0% 9.6%
Selected WACC 8.8%

G.MI'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 G.MI:

cost_of_equity (12.85%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.