ISP.MI WACC - Weighted Average Cost of Capital
The WACC of Intesa Sanpaolo SpA (ISP.MI) is 6.5%.
| Range | Selected | |
| Cost of equity | 11.2% - 14.2% | 12.7% |
| Tax rate | 25.3% - 27.7% | 26.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.0% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.91 | 1.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.2% | 14.2% |
| Tax rate | 25.3% | 27.7% |
| Debt/Equity ratio | 2.15 | 2.15 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.0% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ISP.MI | Intesa Sanpaolo SpA | 2.15 | 1.22 | 0.48 |
| BARC.L | Barclays PLC | 5.38 | 1.81 | 0.37 |
| CABK.MC | Caixabank SA | 1.06 | 1.24 | 0.7 |
| DANSKE.CO | Danske Bank A/S | 6.3 | 0.5 | 0.09 |
| DNB.OL | Dnb ASA | 2.46 | 0.8 | 0.29 |
| NWG.L | Natwest Group PLC | 2.61 | 1.6 | 0.55 |
| SEB A.ST | Skandinaviska Enskilda Banken AB | 2.83 | 1.13 | 0.37 |
| SHB A.ST | Svenska Handelsbanken AB | 6.29 | 0.79 | 0.14 |
| STAN.L | Standard Chartered PLC | 3.78 | 1.73 | 0.46 |
| VMUK.L | Virgin Money UK PLC | 5.91 | 0.86 | 0.16 |
| Low | High | |
| Unlevered beta | 0.34 | 0.41 |
| Relevered beta | 0.87 | 1.04 |
| Adjusted relevered beta | 0.91 | 1.03 |
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 (12.70%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.