The WACC of Deutsche Industrie REIT-AG (JB7.DE) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.70% - 8.20% | 6.95% |
| Tax rate | -% - 4.10% | 2.05% |
| Cost of debt | 4.40% - 4.80% | 4.60% |
| WACC | 5.2% - 6.7% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.0% | 2.5% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.78 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.70% | 8.20% |
| Tax rate | -% | 4.10% |
| Debt/Equity ratio | 0.68 | 0.68 |
| Cost of debt | 4.40% | 4.80% |
| After-tax WACC | 5.2% | 6.7% |
| Selected WACC | 5.9% | |
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 JB7.DE:
cost_of_equity (6.95%) = risk_free_rate (2.25%) + equity_risk_premium (5.20%) * adjusted_beta (0.78) + 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.