GEST.MC WACC - Weighted Average Cost of Capital

The WACC of Gestamp Automocion SA (GEST.MC) is 7.1%.

The Cost of Equity of Gestamp Automocion SA (GEST.MC) is 11.80%.

The Cost of Debt of Gestamp Automocion SA (GEST.MC) is 5.60%.

	Range	Selected
Cost of equity	9.70% - 13.90%	11.80%
Tax rate	22.60% - 22.80%	22.70%
Cost of debt	4.80% - 6.40%	5.60%
WACC	6.0% - 8.3%	7.1%

WACC

GEST.MC WACC calculation

Category	Low	High

Long-term bond rate	3.1%	3.6%
Equity market risk premium	7.4%	8.4%
Adjusted beta	0.88	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	13.90%

Tax rate	22.60%	22.80%
Debt/Equity ratio	1.66	1.66
Cost of debt	4.80%	6.40%

After-tax WACC	6.0%	8.3%


Selected WACC	7.1%

GEST.MC'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 GEST.MC:

cost_of_equity (11.80%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.88) + 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.