GKS.DE WACC - Weighted Average Cost of Capital
The WACC of GK Software SE (GKS.DE) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.8% - 8.8% | 7.3% |
| Tax rate | 28.7% - 31.4% | 30.05% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.6% - 8.5% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.6% | 3.1% |
| Equity market risk premium | 5.5% | 6.5% |
| Adjusted beta | 0.59 | 0.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 8.8% |
| Tax rate | 28.7% | 31.4% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.6% | 8.5% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GKS.DE | GK Software SE | 0.05 | 0.84 | 0.81 |
| CLIQ.DE | CLIQ Digital AG | 0.1 | 0.17 | 0.16 |
| ESI.PA | ESI Group SA | 0.05 | 0.84 | 0.81 |
| FBEN.DE | Fyber NV | 0.33 | -0.13 | -0.11 |
| IDOX.L | Idox PLC | 0.08 | 0.31 | 0.3 |
| LIN.PA | Linedata Services SA | 0.26 | 0.42 | 0.36 |
| NUC.L | Nucleus Financial Group PLC | 0.03 | 1.07 | 1.05 |
| OSP2.DE | USU Software AG | 0.09 | 0.9 | 0.85 |
| SJJ.DE | Serviceware SE | 0.03 | 0.23 | 0.22 |
| TXT.MI | TXT e solutions SpA | 0.37 | 0.88 | 0.7 |
| Low | High | |
| Unlevered beta | 0.33 | 0.75 |
| Relevered beta | 0.39 | 0.7 |
| Adjusted relevered beta | 0.59 | 0.8 |
GKS.DE'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 GKS.DE:
cost_of_equity (7.30%) = risk_free_rate (2.85%) + equity_risk_premium (6.00%) * adjusted_beta (0.59) + 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.