HEI.DE
HeidelbergCement AG
Price:  
180.00 
EUR
Volume:  
495,069.00
Germany | Construction Materials
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HEI.DE WACC - Weighted Average Cost of Capital

The WACC of HeidelbergCement AG (HEI.DE) is 7.0%.

The Cost of Equity of HeidelbergCement AG (HEI.DE) is 8.10%.
The Cost of Debt of HeidelbergCement AG (HEI.DE) is 4.25%.

Range Selected
Cost of equity 6.90% - 9.30% 8.10%
Tax rate 22.60% - 24.80% 23.70%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.1% - 8.0% 7.0%
WACC

HEI.DE WACC calculation

Category Low High
Long-term bond rate 2.8% 3.3%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.8 0.9
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.30%
Tax rate 22.60% 24.80%
Debt/Equity ratio 0.27 0.27
Cost of debt 4.00% 4.50%
After-tax WACC 6.1% 8.0%
Selected WACC 7.0%

HEI.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 HEI.DE:

cost_of_equity (8.10%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.8) + 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.