The WACC of Kion Group AG (KGX.DE) is 6.5%.
| Range | Selected | |
| Cost of equity | 9.70% - 13.20% | 11.45% |
| Tax rate | 28.10% - 30.70% | 29.40% |
| Cost of debt | 4.00% - 4.50% | 4.25% |
| WACC | 5.7% - 7.3% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.36 | 1.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.70% | 13.20% |
| Tax rate | 28.10% | 30.70% |
| Debt/Equity ratio | 1.44 | 1.44 |
| Cost of debt | 4.00% | 4.50% |
| After-tax WACC | 5.7% | 7.3% |
| Selected WACC | 6.5% | |
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 KGX.DE:
cost_of_equity (11.45%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (1.36) + 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.