IBG.MC WACC - Weighted Average Cost of Capital

The WACC of Iberpapel Gestion SA (IBG.MC) is 7.2%.

The Cost of Equity of Iberpapel Gestion SA (IBG.MC) is 8.35%.

The Cost of Debt of Iberpapel Gestion SA (IBG.MC) is 4.25%.

	Range	Selected
Cost of equity	7.40% - 9.30%	8.35%
Tax rate	13.00% - 15.00%	14.00%
Cost of debt	4.00% - 4.50%	4.25%
WACC	6.4% - 7.9%	7.2%

WACC

IBG.MC WACC calculation

Category	Low	High

Long-term bond rate	2.8%	3.3%
Equity market risk premium	6.3%	7.3%
Adjusted beta	0.73	0.76

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	9.30%

Tax rate	13.00%	15.00%
Debt/Equity ratio	0.34	0.34
Cost of debt	4.00%	4.50%

After-tax WACC	6.4%	7.9%


Selected WACC	7.2%

IBG.MC'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 IBG.MC:

cost_of_equity (8.35%) = risk_free_rate (3.05%) + equity_risk_premium (6.80%) * adjusted_beta (0.73) + 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.