IP.MI WACC - Weighted Average Cost of Capital

The WACC of Interpump Group SpA (IP.MI) is 10.6%.

The Cost of Equity of Interpump Group SpA (IP.MI) is 12.20%.

The Cost of Debt of Interpump Group SpA (IP.MI) is 4.30%.

	Range	Selected
Cost of equity	10.60% - 13.80%	12.20%
Tax rate	26.50% - 26.70%	26.60%
Cost of debt	4.00% - 4.60%	4.30%
WACC	9.3% - 12.0%	10.6%

WACC

IP.MI WACC calculation

Category	Low	High

Long-term bond rate	3.7%	4.2%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.60%	13.80%

Tax rate	26.50%	26.70%
Debt/Equity ratio	0.21	0.21
Cost of debt	4.00%	4.60%

After-tax WACC	9.3%	12.0%


Selected WACC	10.6%

IP.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 IP.MI:

cost_of_equity (12.20%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.