INDB.MI WACC - Weighted Average Cost of Capital

The WACC of Indel B SpA (INDB.MI) is 8.7%.

The Cost of Equity of Indel B SpA (INDB.MI) is 10.75%.

The Cost of Debt of Indel B SpA (INDB.MI) is 4.25%.

	Range	Selected
Cost of equity	9.00% - 12.50%	10.75%
Tax rate	26.70% - 29.50%	28.10%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.4% - 10.0%	8.7%

WACC

INDB.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.64	0.84

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	12.50%

Tax rate	26.70%	29.50%
Debt/Equity ratio	0.37	0.37
Cost of debt	4.00%	4.50%

After-tax WACC	7.4%	10.0%


Selected WACC	8.7%

INDB.MI'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 INDB.MI:

cost_of_equity (10.75%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.