The WACC of Ina Invest Holding AG (INA.SW) is 6.0%.
| Range | Selected | |
| Cost of equity | 5.40% - 6.80% | 6.10% |
| Tax rate | 15.90% - 17.60% | 16.75% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 5.5% - 6.6% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 1.0% | 1.5% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.47 | 0.47 |
| Additional risk adjustments | 2.0% | 2.5% |
| Cost of equity | 5.40% | 6.80% |
| Tax rate | 15.90% | 17.60% |
| Debt/Equity ratio | 0.32 | 0.32 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 5.5% | 6.6% |
| Selected WACC | 6.0% | |
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 INA.SW:
cost_of_equity (6.10%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.47) + risk_adjustments (2.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.