The WACC of Gaumont SA (GAM.PA) is 5.7%.
Range | Selected | |
Cost of equity | 5.0% - 6.5% | 5.75% |
Tax rate | 5.0% - 6.6% | 5.8% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.0% - 6.5% | 5.7% |
Category | Low | High |
Long-term bond rate | 3.0% | 3.5% |
Equity market risk premium | 5.8% | 6.8% |
Adjusted beta | 0.35 | 0.37 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 6.5% |
Tax rate | 5.0% | 6.6% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.0% | 6.5% |
Selected WACC | 5.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
GAM.PA | Gaumont SA | 0.05 | 0.17 | 0.16 |
AVE.AT | Ave SA | 0.39 | 0.1 | 0.07 |
ECP.PA | Europacorp SA | 1.37 | 0.97 | 0.42 |
EDL.DE | Edel SE & Co KgaA | 0.77 | 0.21 | 0.12 |
EMAN.L | Everyman Media Group PLC | 3.59 | 0.1 | 0.02 |
HLG.DE | Highlight Communications AG | 4.31 | 0.16 | 0.03 |
LMG.MI | Lucisano Media Group SpA | 2.6 | 0.19 | 0.06 |
MTV.MI | Mondo TV SpA | 2.07 | -1.11 | -0.38 |
SPM.DE | Splendid Medien AG | 0.11 | -0.35 | -0.31 |
WBAH.DE | Wild Bunch AG | 0.91 | -0.06 | -0.03 |
Low | High | |
Unlevered beta | 0.03 | 0.06 |
Relevered beta | 0.03 | 0.06 |
Adjusted relevered beta | 0.35 | 0.37 |
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 GAM.PA:
cost_of_equity (5.75%) = risk_free_rate (3.25%) + equity_risk_premium (6.30%) * adjusted_beta (0.35) + 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.