ISP.MI
Intesa Sanpaolo SpA
Price:  
4.95 
EUR
Volume:  
62,422,510.00
Italy | Banks
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ISP.MI WACC - Weighted Average Cost of Capital

The WACC of Intesa Sanpaolo SpA (ISP.MI) is 6.6%.

The Cost of Equity of Intesa Sanpaolo SpA (ISP.MI) is 12.65%.
The Cost of Debt of Intesa Sanpaolo SpA (ISP.MI) is 5.00%.

Range Selected
Cost of equity 11.10% - 14.20% 12.65%
Tax rate 25.30% - 27.70% 26.50%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.1% - 7.1% 6.6%
WACC

ISP.MI WACC calculation

Category Low High
Long-term bond rate 3.7% 4.2%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.89 1.02
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.10% 14.20%
Tax rate 25.30% 27.70%
Debt/Equity ratio 2.06 2.06
Cost of debt 5.00% 5.00%
After-tax WACC 6.1% 7.1%
Selected WACC 6.6%

ISP.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 ISP.MI:

cost_of_equity (12.65%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.