GEST.MC WACC - Weighted Average Cost of Capital

The WACC of Gestamp Automocion SA (GEST.MC) is 6.8%.

The Cost of Equity of Gestamp Automocion SA (GEST.MC) is 12.25%.

The Cost of Debt of Gestamp Automocion SA (GEST.MC) is 5.10%.

	Range	Selected
Cost of equity	10.10% - 14.40%	12.25%
Tax rate	22.60% - 22.80%	22.70%
Cost of debt	4.60% - 5.60%	5.10%
WACC	5.8% - 7.8%	6.8%

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	0.94	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	14.40%

Tax rate	22.60%	22.80%
Debt/Equity ratio	1.91	1.91
Cost of debt	4.60%	5.60%

After-tax WACC	5.8%	7.8%


Selected WACC	6.8%

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 (12.25%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * 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.