The WACC of Hannover Rueck SE (HNR1.DE) is 7.3%.
Range | Selected | |
Cost of equity | 6.7% - 9.0% | 7.85% |
Tax rate | 20.1% - 21.9% | 21% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.3% - 8.3% | 7.3% |
Category | Low | High |
Long-term bond rate | 2.8% | 3.3% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.76 | 0.85 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.7% | 9.0% |
Tax rate | 20.1% | 21.9% |
Debt/Equity ratio | 0.15 | 0.15 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.3% | 8.3% |
Selected WACC | 7.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
HNR1.DE | Hannover Rueck SE | 0.15 | 0.8 | 0.72 |
MAP.MC | Mapfre SA | 0.25 | 0.89 | 0.75 |
MUV2.DE | Muenchener Rueckversicherungs Gesellschaft AG in Muenchen | 0.1 | 0.72 | 0.66 |
PHNX.L | Phoenix Group Holdings PLC | 0.57 | 1.21 | 0.83 |
PST.MI | Poste Italiane SpA | 3.99 | 0.62 | 0.15 |
PZU.WA | Powszechny Zaklad Ubezpieczen SA | 6.89 | 0.89 | 0.14 |
SCR.PA | Scor SE | 0.72 | 1.36 | 0.87 |
SLHN.SW | Swiss Life Holding AG | 0.41 | 0.58 | 0.44 |
SREN.SW | Swiss Re AG | 0.14 | 0.75 | 0.68 |
TOP.CO | Topdanmark A/S | 0.04 | -0.03 | -0.03 |
Low | High | |
Unlevered beta | 0.57 | 0.69 |
Relevered beta | 0.64 | 0.78 |
Adjusted relevered beta | 0.76 | 0.85 |
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 HNR1.DE:
cost_of_equity (7.85%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.76) + 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.