GIRO.PA WACC - Weighted Average Cost of Capital

The WACC of Signaux Girod SA (GIRO.PA) is 6.6%.

The Cost of Equity of Signaux Girod SA (GIRO.PA) is 9.40%.

The Cost of Debt of Signaux Girod SA (GIRO.PA) is 5.50%.

	Range	Selected
Cost of equity	7.90% - 10.90%	9.40%
Tax rate	29.80% - 31.80%	30.80%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.4% - 7.9%	6.6%

WACC

GIRO.PA WACC calculation

Category	Low	High

Long-term bond rate	2.6%	3.1%
Equity market risk premium	5.2%	6.2%
Adjusted beta	1.02	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.90%

Tax rate	29.80%	31.80%
Debt/Equity ratio	0.97	0.97
Cost of debt	4.00%	7.00%

After-tax WACC	5.4%	7.9%


Selected WACC	6.6%

GIRO.PA'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 GIRO.PA:

cost_of_equity (9.40%) = risk_free_rate (2.85%) + equity_risk_premium (5.70%) * adjusted_beta (1.02) + 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.