IBS.LS WACC - Weighted Average Cost of Capital

The WACC of Ibersol SGPS SA (IBS.LS) is 7.0%.

The Cost of Equity of Ibersol SGPS SA (IBS.LS) is 9.10%.

The Cost of Debt of Ibersol SGPS SA (IBS.LS) is 5.00%.

	Range	Selected
Cost of equity	7.70% - 10.50%	9.10%
Tax rate	11.40% - 13.60%	12.50%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.3% - 7.8%	7.0%

WACC

IBS.LS WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.9%	7.8%
Adjusted beta	0.71	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.70%	10.50%

Tax rate	11.40%	13.60%
Debt/Equity ratio	0.77	0.77
Cost of debt	5.00%	5.00%

After-tax WACC	6.3%	7.8%


Selected WACC	7.0%

IBS.LS'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 IBS.LS:

cost_of_equity (9.10%) = risk_free_rate (3.15%) + equity_risk_premium (7.35%) * adjusted_beta (0.71) + 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.