The WACC of Kinepolis Group NV (KIN.BR) is 4.9%.
| Range | Selected | |
| Cost of equity | 5.00% - 7.70% | 6.35% |
| Tax rate | 26.60% - 26.90% | 26.75% |
| Cost of debt | 4.00% - 4.60% | 4.30% |
| WACC | 4.0% - 5.7% | 4.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.35 | 0.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.00% | 7.70% |
| Tax rate | 26.60% | 26.90% |
| Debt/Equity ratio | 0.87 | 0.87 |
| Cost of debt | 4.00% | 4.60% |
| After-tax WACC | 4.0% | 5.7% |
| Selected WACC | 4.9% | |
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 KIN.BR:
cost_of_equity (6.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + 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.