The WACC of Compagnie Immobiliere de Belgique SA (IMMO.BR) is 5.9%.
| Range | Selected | |
| Cost of equity | 9.20% - 17.60% | 13.40% |
| Tax rate | 12.90% - 20.50% | 16.70% |
| Cost of debt | 4.00% - 7.00% | 5.50% |
| WACC | 4.4% - 7.5% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.06 | 1.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.20% | 17.60% |
| Tax rate | 12.90% | 20.50% |
| Debt/Equity ratio | 5.28 | 5.28 |
| Cost of debt | 4.00% | 7.00% |
| After-tax WACC | 4.4% | 7.5% |
| Selected WACC | 5.9% | |
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 IMMO.BR:
cost_of_equity (13.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.06) + 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.