The WACC of Korian SA (KORI.PA) is 5.6%.
| Range | Selected | |
| Cost of equity | 9.10% - 14.60% | 11.85% |
| Tax rate | 18.50% - 22.50% | 20.50% |
| Cost of debt | 4.00% - 9.10% | 6.55% |
| WACC | 3.7% - 7.6% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 3.1% | 3.6% |
| Equity market risk premium | 6.2% | 7.2% |
| Adjusted beta | 0.95 | 1.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.10% | 14.60% |
| Tax rate | 18.50% | 22.50% |
| Debt/Equity ratio | 13.02 | 13.02 |
| Cost of debt | 4.00% | 9.10% |
| After-tax WACC | 3.7% | 7.6% |
| Selected WACC | 5.6% | |
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 KORI.PA:
cost_of_equity (11.85%) = risk_free_rate (3.35%) + equity_risk_premium (6.70%) * adjusted_beta (0.95) + 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.