ITW.MI WACC - Weighted Average Cost of Capital
The WACC of Itway SpA (ITW.MI) is 8.2%.
| Range | Selected | |
| Cost of equity | 8.0% - 11.1% | 9.55% |
| Tax rate | 11.3% - 22.3% | 16.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.1% - 9.2% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.52 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 11.1% |
| Tax rate | 11.3% | 22.3% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.1% | 9.2% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ITW.MI | Itway SpA | 0.34 | 0.59 | 0.46 |
| ALCA.ST | Alcadon Group AB | 1.02 | 0.01 | 0 |
| ETL.WA | Eurotel SA | 0.34 | 0.15 | 0.12 |
| INTET.AT | Intertech SA | 0.34 | 0.91 | 0.71 |
| IQL.DE | iQ International AG | 0.97 | -0.88 | -0.49 |
| OEX.WA | OEX SA | 0.27 | 0.13 | 0.1 |
| QUEST.AT | Quest Holdings SA | 0.24 | 0.35 | 0.3 |
| S4E.WA | S4E SA | 0.02 | 0.46 | 0.46 |
| SWON.SW | Softwareone Holding AG | 0.08 | 1.14 | 1.07 |
| VDLO.PA | Videlio SA | 0.54 | 0.57 | 0.39 |
| Low | High | |
| Unlevered beta | 0.22 | 0.42 |
| Relevered beta | 0.28 | 0.54 |
| Adjusted relevered beta | 0.52 | 0.69 |
ITW.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 ITW.MI:
cost_of_equity (9.55%) = risk_free_rate (3.95%) + equity_risk_premium (8.80%) * adjusted_beta (0.52) + 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.