HDD.DE
Heidelberger Druckmaschinen AG
Price:  
1.61 
EUR
Volume:  
788,899
Germany | Machinery

HDD.DE WACC - Weighted Average Cost of Capital

The WACC of Heidelberger Druckmaschinen AG (HDD.DE) is 8.0%.

The Cost of Equity of Heidelberger Druckmaschinen AG (HDD.DE) is 8.5%.
The Cost of Debt of Heidelberger Druckmaschinen AG (HDD.DE) is 6.5%.

RangeSelected
Cost of equity7.3% - 9.7%8.5%
Tax rate30.0% - 30.0%30%
Cost of debt4.3% - 8.7%6.5%
WACC6.7% - 9.2%8.0%
WACC

HDD.DE WACC calculation

CategoryLowHigh
Long-term bond rate2.8%3.3%
Equity market risk premium5.1%6.1%
Adjusted beta0.890.97
Additional risk adjustments0.0%0.5%
Cost of equity7.3%9.7%
Tax rate30.0%30.0%
Debt/Equity ratio
0.150.15
Cost of debt4.3%8.7%
After-tax WACC6.7%9.2%
Selected WACC8.0%

HDD.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 HDD.DE:

cost_of_equity (8.50%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.89) + 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.